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Gateway unveils low-cost Celeron PC

The new desktop computer, featuring a 333-MHz Celeron chip, is priced at $999, below similar lines from competitors.

    Gateway today introduced the E-1200, a sub-$1,000 desktop computer with monitor for business users featuring Intel's new Celeron processor.

    The new Celeron processors, which come in speeds of 300 and 333 MHz and contain 128KB of integrated cache memory, are widely considered to give Intel's pricier Pentium II processors a run for their money in terms of performance.

    On some systems there may be only a 5 percent performance difference between Pentium IIs and the new Celerons running at the same speed, according to Roger Kay, an analyst at International Data Corporation.

    But what may catch most customers' eyes is the price of the new Gateway system, which includes a 333-MHz Celeron. At just under $1,000, the E-1200 is priced fairly far below comparable machines.

    Most 333-MHz Celeron systems start at over $1,100. Hewlett-Packard has a sub-$1,000 system with that processor, but it comes with no monitor.

    The new 1200 joins Gateway's existing 3200 commercial desktop PC, a similar system featuring a Pentium II 300-MHz processor. Both systems feature 32MB of memory, 3.2GB hard drive, 15-inch monitor, integrated Ethernet and standard manageability tools. Like the 3200, the 1200 also features a slide-out motherboard and convertible chassis, which is designed to allow tool-free maintenance. However, the 3200 is $400 more.

    The desktops are targeted at somewhat different audiences, Gateway contends, with the 3200 aimed at more conservative enterprise customers, and the 1200 focused on the more price-conscious organization.

    "There's a certain comfort level at the higher end of the enterprise, when they're standardized on the [Pentium II] chipset," said Keith Karlsen, director of enterprise products for Gateway, who predicted that Celeron will gain a stronger footing in the corporate market by the end of 1998.

    Also, the newer versions of Celeron, although acclaimed for its performance, may still be clouded by the early performance issues with the older versions of the chip.

    "Celeron has had a bit of a bumpy road out of the gate," Karlsen said, referring to the earlier performance problems. In fact, Gateway decided to wait for the later version, skipping the earlier Celeron chips altogether.

    "There's a lot of interest in Celeron, but whether that's affecting buying behavior at this point remains to be seen," Karlsen said, noting that customers are waiting to see more substantial support from Intel before adopting the Celeron platform.

    "We expect there to be a ramp in Celeron purchases by the end of the third quarter, but customers want to know how serious Intel is behind this, what kind of momentum they are planning to build, what kind of advertising and campaigns."