As previously reported, the launch is a way to counter the success rival AMD has had with the Athlon, a Pentium III competitor that has received rave reviews. AMD released a 750-MHz version of the chip late last month. Although AMD had supply crunches of its own earlier this year, Athlon processors are becoming much easier to find, according to sources.
AMD, however, will be coming out with an 800-MHz Athlon in January, according to a number of sources, and has been showing off computers with prototypes of a 900-MHz version.
Today's announcement, however, is symbolic to a certain extent and reflects the pressure Intel is experiencing in its core market. Few of the new chips, originally scheduled for the first quarter of 2000, have been shipped to PC makers, sources said, meaning consumers won't see many computers using them until next year.
In a statement, Intel said the new processors would not ship in volume until the first quarter. The 800-MHz version will cost $851 in 1,000-unit quantities and the 750-MHz Coppermine will go for $803.
Historically, Intel waited until it was producing fairly substantial volumes of its new, faster chips before taking them public. The emphasis for both companies apparently has shifted to getting the faster chips out at a more rapid rate.
"They are definitely in a reactive mode to AMD. None of this stuff has been planned ahead," said Linley Gwennap, publisher of the Microprocessor Report. "AMD has Intel sweating."
The emphasis on getting faster chips out more quickly will benefit performance fanatics, commented Nathan Brookwood, an analyst at Insight 64. If Intel accelerates the release of the 800-MHz chip, this will likely lead to quicker releases of faster Athlons and even 1-GHz processors earlier than expected.
"What we're likely to see is Intel taking the lead, and then AMD taking it back," he said. An accelerated schedule would also mean the company is having greater-than-expected success with the 0.18-micron manufacturing process, a more refined manufacturing process that allows Intel to use smaller wires and transistors.
Benchmark test results bear this out. Tests posted today on both The Meter and SharkyExtreme show that the 800-MHz Pentium III has a slight edge over the 750-MHz Athlon. However, the 750-MHz Athlon retains an edge over an equally fast Pentium III, according to the test results.
Performance processors typically have come out in small volumes that grow over time--but that trend appears to be changing. Analysts and some computer makers continue to note that there are still limited supplies of the 733-MHz Coppermine Pentium IIIs, which were announced in October. Coppermine was the code name for the new generation of Pentium IIIs that came out that month. Coppermines differ from the standard Pentium III because, among other reasons, they are made in the 0.18-micron process.
"Intel wants to go into the next millennium with the fastest PC processor," said Ashok Kumar, an analyst at US Bancorp Piper Jaffray. Regarding availability, he said, "1.5 million Coppermine processors will be shipped this quarter. Clearly there is a supply constraint."
There are also continuing supply problems with the components. One is motherboards, which are necessary to couple the latest Pentium III chips with Rambus memory, a vital ingredient for wringing out the full performance potential of the latest Pentium IIIs, sources said.
"The 700-MHz [Pentium IIIs] are getting easier and easier to get. The 733s are impossible to find," said one executive at a small computer maker, who added that Intel's Rambus-centric motherboards are extremely difficult to find. "Nothing has come out with Rambus on it."
An analyst note issued today by Richard Gardner of Salomon Smith Barney reiterated the point. PC manufacturers face a slight risk for lower-than-expected revenues this quarter "due to Intel microprocessor supply constraints," he wrote.
Gateway is one victim of Intel supply shortages and the ongoing battle between AMD and Intel. Merrill Lynch analyst Steve Fortuna said on Friday, Intel processor shortages had disproportionately affected Gateway, and he lowered fourth-quarter sales estimates by $117 million. Gateway only recently moved to all Intel processors, having previously offered AMD processors on many consumer systems.
While a speedy release can give a company bragging rights, the associated low volumes can backfire on manufacturers as well, because customers get weary of not being able to get the glorious product they have read about, said Peter Glaskowsky, an analyst at MicroDesign Resources.
Apple in the past has run into this problem, he said. Historically, Intel has enjoyed a reputation for being able to produce steady volumes, he added.
How the product road map for Intel and AMD will change in the future is uncertain, but most likely the chips will come out faster than expected.
Willamette, the code name for the chip that will succeed the Pentium III, is due toward the end of 2000. Intel has said it will run at 1 GHz (1,000 MHz) and faster. An acceleration of the road map, however, may mean that Intel churns out a 1-GHz Pentium III in 2000 and releases Willamette at a faster speed, said Brookwood.
For its part, AMD is slated to come out with an 800-MHz Athlon in the first part of 2000 and hit 1 GHz by the second half. The company also will bifurcate the Athlon line so that it can fit into inexpensive PCs and notebooks.
Pure chip speed aside, the overall performance of both chips is affected by other factors. The Athlon, for example, comes with a 200-MHz system bus, which will get faster. The Pentium III currently uses a slower 133-MHz or 100-MHz system bus.
By contrast, the Pentium III can currently be paired with faster Rambus memory when available or 133-MHz computer memory, or SDRAM. Athlon right now is only used with slower 100-MHz SDRAM.