Intel Cuts Prices, Readies Faster PC Chips

The chip maker plans to release Pentium III processors running at 833MHz and 866MHz by the end of March, according to the source. Intel will launch a Pentium III chip running at 1GHz by the end of June, the source said. An Intel spokesman today declined to comment on the source's remarks.

Intel said recently that it plans to boost the speed of its desktop Pentium III processors to 900MHz or greater by the end of the second quarter of this year. However, the chip giant has told customers not to expect a 1GHz chip until the second half of the year.

The company is locked in a battle with Advanced Micro Devices Inc. (AMD) to offer the fastest desktop PC chip on the market. Intel's fastest Pentium III currently tops out at 800MHz, while AMD earlier this month released an 850MHz version of its Athlon chip. Clock speed is only one measure of a processor's performance, but along with price it's the feature consumers tend to pay closest attention to when shopping for a PC.

For sub-US$1,000 PCs, also at the end of next month, Intel expects to release Celeron processors running at 566MHz and 600MHz, up from today's 533MHz, the source said. For workstations and servers, Intel has said it will release Pentium III Xeons at 900MHz or greater by the end of the first half of the year.

Intel typically cuts prices on its current line of processors to make way for new offerings, and the price cuts, which took effect yesterday, may reflect such a move. An Intel spokesman declined to comment in detail on the company's future chip plans. On its Web site, Intel called the price cuts part of the company's typical pricing activity.

Intel's 800MHz Pentium III is now priced at $647, down 24 percent from $851. The 750MHz version dropped 29 percent to $530, down from $744. Other Pentium III processor prices were slashed from between 10 to 26 percent, according to information on the company's Web site.

On the Celeron side, the 533MHz version is now priced at $127, down 24 percent from $167. The 500MHz Celeron is priced at $93, down 27 percent from $128, while the 466MHz Celeron is priced at $73, down 18 percent from $89.

For workstations and servers, meanwhile, Intel cut the price on its three fastest Pentium III Xeon processors. The 800MHz version is now priced at $697, down 23 percent from $901. The 733MHz Xeon is priced at $505, down 22 percent from $644, while the 667MHz Xeon is priced at $425, down 15 percent from $644.

All prices are for 1,000-unit quantities. Prices of Intel's mobile chips weren't affected.

Separately today, Intel announced the e-Business Solution Provider Program, an initiative to work with Web integrators to help them develop systems for electronic commerce built around Intel-architecture-based computers.

Also today, InfoInterActive announced it has secured a US$6.9 million investment from Intel Capital, the chip maker's investment arm. Intel has licensed InfoInterActive's Call Manager and Flexline services for use with a family of Intel-branded Internet appliances that the chip maker has said it will launch later this year.

Intel also made an investment in Molecular OptoElectronics (MOEC), a provider of fiber-optic components, MOEC announced yesterday. Financial terms of the investment were not disclosed.

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