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Intel preparing new mobile chips

The new line of chips will include a low-cost Celeron running at more than 1GHz. Coming soon: new notebooks with the chips and price cuts on existing systems.

Intel will launch a line of new chips for mobile PCs next week that includes a low-cost Celeron running at more than 1GHz.

The Santa Clara, Calif.-based chipmaker will release a new mobile Celeron running at 1.06GHz and two low-power Pentium III-M chips for ultra-portable machines, sources familiar with Intel's plans said. Soon after the launch, consumers can expect to see new notebooks with the chips and price cuts on existing systems.

Intel declined to comment. The Celeron is the lower-cost relative of the more feature-rich Pentium chip.

The new Celeron is being manufactured using Intel's newer 130-nanometer (0.13 micron) process rather than with the older 180-nanometer process, sources said. As a result, circuits and other features on the chip will be approximately 50 percent smaller, which reduces manufacturing costs and makes it more energy efficient.

While the new Pentium III-M chips won't run as fast as the Celeron, they will consume less power. As a result, notebooks that incorporate them can contain smaller heat sinks and other insulating equipment. Battery life also is extended in such systems.

The new Pentium III-M chips will include a 750MHz ultralow-voltage chip for mini-notebooks weighing 3 pounds or less and a 866MHz low-voltage Pentium III-M chip for 3.5- to 4-pound notebooks, sources said.

Intel last updated this line of chips in October.

IBM is expected to release several new ThinkPad models next week. The ThinkPad R Series will incorporate the 1.06GHz Celeron, while a new ThinkPad X Series ultra-portable will use the 866MHz low-voltage Pentium III-M, according to sources familiar with the company's plans.

Meanwhile, Toshiba is expected to announce a new Portege mini-notebook that uses the ultralow-voltage 750MHz Pentium III-M.

"Intel has been aggressive on Celeron pricing," said Mike Feibus of Feibus Consulting. "The 0.13 micron process will give them a lower-cost structure for Celeron, which could pave the way for future (price) cuts."

As prices continue to fall and speeds increase, notebooks have become increasingly popular with consumers.

Although PC sales declined in 2001, notebooks grew as a percentage of overall PC sales.

The average selling price of a notebook fell from $2,075 in the third quarter of 2000 to $1,800 in the third quarter of 2001, according to market researcher IDC. Many notebooks that once sold in the $1,300 to $1,500 range are now selling for $1,100 or so, and some manufacturers have machines that cost less than $1,000.

"Consumer notebook demand got pummeled in (the fourth quarter of 2000). It started to pick up pretty dramatically" in the second quarter of last year, said Alan Promisel, an analyst with IDC. During the third quarter of 2001, notebooks accounted for 25 percent of PC shipments, up from 22 percent during the same period in 2000.

Meanwhile, notebook sales at retail during the recent holiday-shopping season were up nearly 20 percent from the same period in the previous year, according to NPD.