Intel introduces 2GHz Pentium 4, cuts prices

With the launch of its 2GHz Pentium 4 processor, Intel, as expected, on Monday cut prices on the rest of its Pentium 4 family, as well as many of its other processors.

The 2GHz Pentium 4 is available now, Intel said in a statement. Intel also introduced a 1.9GHz Pentium 4 processor. PC vendors, including direct sellers Dell Computer and Gateway, are offering systems based on Intel's new chips.

The 2GHz Pentium 4 is replacing the 1.8GHz version as Intel's fastest chip and will be sold for the same price wholesale: US$562 each in 1,000-unit quantities. The 1.9GHz Pentium 4 is priced at $375, a slight price increase for Intel's second fastest chip. The company's former number-two chip was the 1.7GHz Pentium 4, which cost $352.

When Intel introduces new chips, it usually also adjusts prices on old chips. To make room for the 2GHz processor in the top slot, Intel dropped the price of its previous highest-speed chip, the 1.8GHz Pentium 4, by 56 percent, from US$562 to $256, according to information on Intel's Web page. Intel also cut the prices of both its 1.7GHz and 1.6GHz chips by 45 percent, to $193 and $163, respectively. Intel slashed the price of its 1.5GHz Pentium 4 by 48 percent to $133. Wrapping up the cuts across the entire Pentium 4 family, Intel also reduced the prices of its 1.4GHz and 1.3GHz Pentium 4 processors by 31 percent, to matching prices of $133, according to the Web site. Matching the prices of the slowest processors in a family is a standard practice in the industry to kill off the slower speeds.

In addition to slashing the prices of its Pentium 4 line to make room for the new chips, Intel also cut the prices of its Xeon processor family, Pentium III Processor-S family, Celeron desktop processors and its three fastest Pentium III desktop processors.

Its Xeon family, for workstations and servers, saw price cuts across all three speeds, with the 1.7GHz version dropping 37 percent to $256, and the 1.5GHz and 1.4GHz versions dropped 41 percent and 32 percent respectively, to $183.

The Pentium III Processor-S chips dropped in price to $337 for the 1.26GHz processor -- a 9 percent drop -- and to $257 for the 1.13GHz model, an 18 percent reduction, according to the company's Web site. These chips are built using a 0.13-micron manufacturing process, which can help Intel make processors that use less power and produce less heat than chips such manufactured using the larger 0.18 process, such as older Pentium IIIs. The 0.13-micron chips were originally aimed at notebooks, where heat and power consumption are most important, but was also used to feed the fast growing market for slimline servers, called "blade" servers.

The company also cut the price of its entire line of low-cost Celeron desktop processors to $64. Intel cut the price of its 900MHz version by 28 percent, the 850MHz and 800MHz by 14 percent, and the 766MHz processor by 7 percent, giving them all matching prices, according to the company's Web site.

In other news, Intel said it will also launch two desktop boards and preview its upcoming low-cost 845 chipset Monday at its Developer Forum in San Jose, California. The SDRAM-based 845 platform should bring down prices of PCs even further, according to Intel.

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