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300-MHz Pentium II notebooks on tap

Next month, Intel will release a 300-MHz Pentium II for portable PCs and cut prices on the rest of its mobile chip line.

A flotilla of new notebooks will set sail on September 9 when Intel releases a 300-MHz Pentium II for portable PCs and cuts prices on the rest of its mobile chip line.

What's more, the September price cuts will be closely followed by another round of price drops that will lower the 300-MHz chip from its introductory price of $637 to around $371, according to sources. Together, the new chip and two pricing actions could mark another stage in the notebook world's developing low-cost market.

The timing and exact extent of these price cuts remain in flux, according to sources. Another caveat: The prices apply to volume purchases. But overall it looks like more good news for consumers.

"You are seeing more incremental price drops," said Gerry Purdy, president of Mobile Insights. "Intel wants to move the entire mobile platform onto Pentium II."

One reason for falling costs seems to be the disparity between desktop and notebook pricing. Comparative pressures are already prompting notebook vendors to bring 233-MHz Pentium II notebooks to market for around $2,000.

"The pricing pressures that were going on in the desktop arena are being paralleled in the notebook space. Manufacturers are now starting to put pressure on each other," said David Thor, director of research with Sherwood Research, a consulting firm covering mobile PC technologies.

Additionally, notebook sales have slowed. According to Scott Miller of Dataquest, growth in desktops outpaced notebooks in the second quarter--a historical anomaly.

Leading vendors Toshiba, IBM, Hewlett-Packard and NEC, among others, will release (or at least announce) new notebooks at the same time as the 300-MHz chip's debut.

Toshiba has said that it will use the chip in its ultraportable Portege 7000CT and in its standard-sized Tecra 8000 business notebooks. IBM will support the new chip across all of its ThinkPad computers, said sources close to the company. The line includes the full-featured 770, the slimline 600 and 560 models, and the lumpy, yet reliable, 380.

HP and NEC are expected to feature the chip in the high-end notebooks across their various product lines.

Broad adoption across form factors is possible because of the chip's packaging. Starting with the "Tillamook" Pentium MMX notebook chips, Intel began to case its chips in a module that can accommodate at least two generations of chips at different speed grade. As a result, little engineering is needed to pick up new chips.

"Mostly it's thermal and regulatory testing," said one source.

Major manufacturers will likely use this September release to phase out the older Pentium MMX notebook lines. Pentium MMX machines will still be sold, but few if any new models will use the chip. Nearly every new Intel-based notebook going forward will contain a Pentium II processor.

Meanwhile, the 266-MHz Pentium II chip for mobile PCs will drop from a current price of $444 to $371 next month, and to $209 after the fall cut. The 233-MHz Pentium II, which now sells for $262, will drop to $209 in September.

Intel is an investor in CNET: The Computer Network.