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Lower-priced Pentium 4 PCs hit the market

PC makers are launching new computers that combine discounted Pentium 4 chips with standard memory. The result: 1.5GHz Pentium 4 PCs starting as low as $799.

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  Intel chipset lowers PC prices
Nathan Brookwood, analyst, Insight 64
The low-priced Pentium 4 desktop has arrived.

As expected, PC makers on Monday launched a bevy of new computers that combine Pentium 4 processors with standard memory. These machines don't perform as well on many applications as similar computers with Rambus memory, but in general they cost less. The result: 1.5Ghz Pentium 4 PCs typically starting at $799, sans monitor.

Previously, starting prices for Pentium 4 PCs ranged from $1,000 to $1,300, although a few configurations could be found for $799.

PC makers will use the lowered price tags to replace their Pentium III offerings with Pentium 4 PCs, for about the same price. A new chipset in the systems, the 845, also changes the PC landscape, creating a new stratification of systems, with Celeron-based PCs at $900 and below, 845-based PCs at $900 and above and, at $1,500 or more, high-end desktops with faster Pentium 4 chips, Intel's 850 chipset and RDRAM. A chipset is a group of processors that supports a range of PC functions, including the memory controller and input/output.

A key factor behind the lower PC prices is Intel's newest chipset, the 845, which marries the Pentium 4 with standard SDRAM memory. Until now, Pentium 4 PCs had been available only with Intel's 850, which required Rambus DRAM. The 845 was introduced in July.

PC makers such as Dell Computer will use the 845 to usher out the Pentium III in its consumer PC lines in favor of Pentium 4 within 90 to 120 days. It will take as long as a year to convert corporate PCs to Pentium 4. Pentium III will live on in notebook PCs for some time.

"This is the first time we've been able to offer this type of pricing so soon" after the launch of a new processor, said Jeff Clarke, vice president and general manager of Dell's client business.

The company launched two new PCs on Monday: the Dimension 4300 and the OptiPlex GX240, both offered with the new chipset and SDRAM.

The Dimension 4300 starts at $849 and packages a 1.5GHz Pentium 4 with 128MB of SDRAM, a 20GB hard drive, CD-ROM and 15-inch monitor. The new OptiPlex GX240 starts at $799 for a similar configuration, sans a monitor. A more typical configuration will include a 1.7GHz Pentium 4, 128MB SDRAM, 20GB hard drive, CD-ROM drive and 17-inch monitor, at a cost of about $1,175, the company says.

Pentium 4 PCs
By using standard memory instead of Rambus, PCs with Pentium 4 chips will cost less.

Model Configuration List price
  Dell Dimension 4300     1.5GHz Pentium 4   
128MB SDRAM
20GB hard drive
15-inch monitor


    $849  
  Dell OptiPlex GX240     1.5GHz Pentium 4
128MB SDAM
20GB hard drive
no monitor


    $799  
  HP Vectra vl420     1.6GHz Pentium 4
128MB SDRAM
20GB hard drive
no monitor


    $899  
  Gateway E-3600     1.5GHz Pentium 4
128MB SDRAM
20GB hard drive
17-inch monitor


    $1,199  

Source: PC makers
Hewlett-Packard on Monday unveiled a simplified business PC lineup featuring 845-based PCs. The company has done away with its Brio brand and has instead adopted Professional and Essential for its two business lines. As part of the new Professional line, HP launched the Vectra vl420. The desktop will offer a 1.6GHz Pentium 4, 128MB of SDRAM and a 20GB hard drive for $899.

Gateway's new E-3600, starting at $1,199, will offer a 1.5GHz Pentium 4, 128MB of SDRAM and a 20GB hard drive, along with a 17-inch monitor. The E-3600 will replace its E-3400, a Pentium III computer that accounts for roughly 60 percent of Gateway's business desktop sales, which largely go to education, government and medium-sized businesses. Gateway also launched the Performance 1500 CS, a new line of Pentium 4/SDRAM PCs for the consumer market, starting at $999.

MicronPC also joined the fray on Monday, announcing the ClientPro CR. The desktop will feature a 1.5GHz Pentium 4, 128MB of SDRAM, a 20GB hard drive and a 17-inch monitor for about $999.

At a later date, Compaq Computer will offer PCs with the 845 chipset and Pentium 4 processor.

For its corporate customers, Compaq plans to launch a new Evo D500 desktop by the end of the quarter, company executives said. Compaq's goal with the new Evo is to offer a Pentium 4 system for the same price as its current Pentium III PCs.

The new 845 systems represent a definite shift in the market because, until now, most business customers have stuck with Pentium III.

"At the beginning, the transition (to Pentium 4) was slower because there was a big premium for Rambus and it was an unknown," said Dan Coffman, Gateway's business desktop product manager.

Customers' preferences will likely be toward SDRAM systems. Coffman estimated that 75 percent to 80 percent of Gateway's business customers will chose SDRAM/Pentium 4 computers. Rambus' memory had been a tough sell to corporate buyers because of a combination of delays, recalls and higher initial pricing.

Some market segments, however, will adopt RDRAM more heavily. The education market, for one, needs the extra performance, while government customers go for upscale configurations. "They buy rich," Coffman said.

In some ways, it's an issue of price over performance. In equally configured machines, the Pentium 4/SDRAM computer will cost about $100 less, he said, but the machine equipped with Rambus will provide about 10 percent better performance, depending on the application.

Of course, it all depends on perspective. Samsung, a major manufacturer of Rambus, has pointed out that a 1.5GHz Pentium 4 with Rambus will both cost less and outperform a 1.7GHz with standard memory.

For the lower cost, buyers will have to trade off some performance, analysts say.

"You're going to take a performance impact," said Dean McCarron, principal analyst at Mercury Research. "The reality, though, is that it doesn't matter" for most corporate customers.

The preference for SDRAM computers isn't likely to spill over into a love of DDR DRAM, a faster version of SDRAM. Business customers are inherently conservative and will be as wary of it as they were of Rambus.

"We certainly would not expect them to graduate quickly to DDR," Coffman said.

Intel's 845 chipset is priced at $42 in quantities of 1,000.