Intel cut prices on the Pentium III line by 10 to 14 percent, according to the company, and will cut prices on Pentium III and other chip families again on August 1 and 22, according to sources, cuts that no doubt will be followed appropriately by rival AMD.
New chips will also come out soon. A 600-MHz Pentium III will arrive on August 1, followed by the 820 "Camino" chipset in September, which will allow for faster Rambus-style memory. An improved version of the Pentium III with integrated secondary cache memory, called Coppermine, will come in November, according to Intel. Consumers can also expect to see a 500-MHz Celeron next month.
The price war took its toll on both companies in the second quarter. Intel's earnings for the quarter came to $1.7 billion, a hearty figure, but one that was below expectations. AMD, meanwhile, reported a $163 million net loss. Both companies blamed low processor prices. Whether the companies will continue to fight with price cuts, or ease up, is the subject of a debate among analysts.
With the release of Athlon, however, AMD now has a chip that will compete in the higher-end, "performance" PC segment. Analysts who have tested the chip and examined its architecture have nearly universally stated that the Athlon offers more performance than a Pentium III running at the same clock speed.
Although released last month, Athlon, also known as the K7, won't appear in PCs or be available in quantities until August. The Pentium III price cuts essentially reduce the price gap between the products and prod AMD to make discounts. The Pentium III discounts coming over the weekend are steeper than earlier planned, according to sources.
The new prices are as follows:
The 550-MHz Pentium III dropped 12 percent from $744 to $658 while the 500-MHz version of the chip went from $482 to $423. The 450-MHz Pentium III and 450-MHz Pentium II, meanwhile, fell from $268 to $230. These are volume prices for wholesale purchases.
The August discounts will be larger, according to sources in the chip community. Among the highlights: the 600-MHz Pentium III will debut at $656 while a 533-MHz Pentium III will come out at $362. By August 22, the 500-MHz Pentium III will sell in volume for $247.
Retail prices will vary depending on supply, the time of the month, and other factors. Some retailers, for instance, are currently selling versions of the Pentium III at lower prices than the "official" wholesale price. Prices also vary slightly depending upon the chip packaging.
The 500-MHz version of Athlon currently sells for $324 while the 550-MHz and 600-MHz versions sell for, respectively, $479 and $699. Tight supply of Athlons, however, is creating something of a high ceiling price for the chip. Retailers are offering the 600-MHz version for $950, where available, while the 550-MHz and 500-MHz versions are being advertised for $720 and $488.