The price cut is a result of Intel's production process, according to Rob Enderle, analyst with the Giga Information Group. "Intel is way ahead of where they thought they would be with their new chip-manufacturing process," said Enderle. "They are now able to produce more chips at a faster rate and a lower cost," he added.
Users will be able to buy entry-level machines with chips that run at 120 MHz and 133 MHz by the end of the year, according to Intel officials. "From a user standpoint, the machines will not only be a better price, but will also perform better and faster," said Enderle.
The price reduction is expected to cause problems for competitors like Advanced Micro Devices and Cyrix, according to Enderle. "They [competitors] won't sleep any easier at night," he said. "Intel continues to price so aggressively that it is difficult for competitors to get a foothold of the market."