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550-MHz Pentium III systems rolled out

Intel turns up the heat yet again, releasing faster Pentium III processors, sparking a parade of new computers and price cuts on existing systems.

Intel today turned up the heat yet again when it released faster Pentium III processors, sparking a parade of new computers and price cuts on existing systems.

Intel today rolled out a 550-MHz Pentium III chip. In turn, most major PC makers introduced new desktop computers ranging in price from $1,800 to $2,300, as well as new workstations and servers.

Along with the new chips, Intel cut prices Reviews of new PIII PCs on existing Pentium III and Pentium II processors yesterday, setting a wave of PC price cuts in motion. Rival AMD matched the price drops with cuts of its own. (See related story.)

Manufacturers including Hewlett-Packard, Compaq Computer, Dell Computer, and IBM are all supporting the 550-MHz version of the Pentium III, with many cutting prices on older systems.

Most manufacturers are cutting prices on existing systems to make room for the new Pentium III computers. HP, for example, is cutting prices by up to 25 percent across its line of corporate PCs, workstations, and servers, as it simultaneously introduces new 550-MHz systems. Compaq is reducing prices on its Presario line of Internet PCs by up to $230.

New 550MHz Pentium III systems introduced today include:

• Compaq Presario 5600I home PC, $1,889.
• Toshiba Equium 7100 corporate desktop, $1,729.
• Dell Precision Workstation, $2,041.
• Hewlett-Packard NetServer LPr, $3,900.

Intel Price Cuts
Speed Current price May 16 July 18 Sept.
Pentium III
600-MHz
N.A. N.A. N.A. $761
550-MHz N.A. $730 $658 $520
533-MHz N.A. N.A. N.A. $415
500-MHz $637 $482 $423 $299
450-MHz
$411 $268 $230 $213
Pentium II
450-MHz
$396 $268 $230 $213
400-MHz $234 $193 $183 $163
350-MHz $163 $163 $153 $153
Celeron
500-MHz
N.A. N.A. N.A. $185
466-MHz $169 N.A. $157 $147
433-Mhz $143 N.A. $133 $113
400-MHz $103 N.A. $93 $83
366-MHz $73 N.A. $73 $73
Source: Various
"The 550MHz Pentium III processor enables powerful computers to run the next generation of productivity and media rich applications in modern multitasking operating systems, both on and off the Internet," said Pat Gelsinger, vice president and general manager of Intel's desktop products group, in a statement.

Rival AMD slashed chip prices within hours of the Intel price cuts, and is expected to roll out its K7 processor in June. Consumers, of course, will likely benefit through the months with regular discounts on PCs, notebooks, and servers.

The price war means 1999 is turning into a good one for bargain hunters, as processor companies are accelerating their discounts in an effort to take market share from each other. Both Intel and AMD cut prices just one month ago.

Two years ago, these companies cut prices only once a quarter.

More price cuts will follow in July and again in early September in conjunction with the release of Intel's "Coppermine" Pentium III chips. Running at 600 MHz and 533 MHz, the Coppermine processors contain architectural innovations to boost system performance.

HP also launched today a Pentium III 550-MHz Vectra corporate PC with 128MB of memory and 13.5GB hard drive for $2,369. The new Pavilion 8495 home PC comes with 128MB of memory, 19GB hard drive, and rewritable CD-ROM drive and will be priced at $2,499. The new HP Kayak XA-s PC Workstation with 128MB of memory and 9.1GB hard drive is priced at $3,390.

Dell rolled out new PowerEdge servers, Dimension consumer PCs, Optiplex corporate computers. The new Dimension XPS T series will feature updated graphics cards and new 3D multimedia capabilities for games and digital imaging. The new computers start at $1,949 for a system with 96MB of memory, a 9.1GB hard drive, and 17-inch monitor.

News.com's Michael Kanellos contributed to this report.