Intel crunches chip prices
By R. Ramasubramoni | 23 Aug 1999
A lot of news on the processor front. From Intel, the market leader, of course. Intel has decided to reduce its prices for the Pentium III range of processors, from September. The price cuts are between 20 and 40 per cent, and are expected to significantly affect the PC market, coming as they do within eight months of the chip's launch (click here for details).
Intel's Pentium III 500-megahertz processor will now be sold at $250, instead of $400. The 450-MHz variant will be priced at $185, against $225 earlier. The cheaper, entry level version Celeron will come at $75 instead of $100. Two more variants of the Celeron, with speeds of 433 and 466 MHz will be offered shortly.
If that points to cheaper PCs, the accompanying bad news is that the earlier P II is now being confined to history -- taken off the shelves. This is after it had achieved a 51 per cent share of the PC market in 1998-99 in India.
This has been consistent with Intel's strategy of introducing a new chip, taking the cream of the market, dropping prices to penetrate the market and dumping the earlier one. While this might make P III-based PCs more affordable in the price conscious part of the Indian market (the home user, SOHO and SMEs accounted for nearly half of the market last year), what it might do to actual computing experience remains to be seen. The significant capabilities of the chip, like multimedia and graphics processing need software written for the chip.
This will bring a P-III-based PC (with 32 MB RAM, 4.3 GB hard disk, 14-inch colour monitor, multimedia kit) in the sub-Rs.50,000 range, something which Zenith had managed to offer, among the branded PCs. (see 'Zenith made it')
Along with this, Intel has also announced the Xeon family of P III chips for the server and workstation market. Two other announcements are about the i810 chipset launch and the Strongarm processors.
The chipset goes into the main processor P III, which has graphics and multimedia capability built into it. Intel acquired the Strongarm technology from Digital equipment. This technology goes into information appliances like handheld devices.
All this comes in the wake of fresh challenges to Intel from its competitors AMD and Cyrix. AMD is now intent on cutting away at its market both at the top end and the low end. (see AMD lines up Athlon).
