Partially as a result, analysts expect to see a strong Christmas with certain Pentium II configurations selling at or below $2000. Dell, in fact, today released a 233-MHz Pentium II computer that sells for $1,939, the first Pentium II system from a major vendor to sell below $2,000. The trend is in turn expected to drive computers with the 166-MHz Pentium MMX chips or an equivalent below $1,000.
The flurry of releases today come as a result of the Accelerated Graphics Port (AGP), a dedicated graphics pathway between the graphics accelerator and main memory that allows for high-end 3D graphics at relatively low prices. The new technology is expected to lead to more, and cheaper, multimedia graphics. AGP is a feature of the 440LX chipset, which was released today by Intel (INTC). (Intel is an investor in CNET: The Computer Network).
Dell incorporated the new chipset in the Dimension line of home computers as well as its OptiPlex corporate computers. Computers in the Dimension D line start at $2,399 for a base configuration with a 233-MHz Pentium II, the 440LX chipset, 32MB of RAM, and a 4.3GB hard drive. A base configuration for a Dimension D with a 300-MHz Pentium II with 64MB of RAM starts at $2,999.
A base configuration of an OptiPlex GXa with 233-MHz Pentium II, the 440LX chipset, and 32MB of memory sells for $1,939 with monitor. The OptiPlex Gn line, which employs Pentium MMX chips, now starts at $1,479.
NEC is providing similar features and price points to the Dell computers in its Direction line of computers, which are built and configured to order. A base-level Direction computer with a 233-MHz Pentium II and 440LX chipset starts at $2,199, including monitor.
HP will use a graphics chip from ATI Technologies and Intel's 440LX chipset in the Pavilion 8190 consumer PC, a Hewlett-Packard spokesperson said.
Micron, by contrast, is initially using the new chipset in higher-level configurations only. The company is offering a 266-MHz Pentium II Millennia system with the 440LX chipset, 64MB of RAM, a 17-inch screen, a 6.4GB hard drive, and other features for $3,199. A Millennia XRU (a 300-MHz system with 128MB of SDRAM and an 8.1GB Ultra ATA hard disk) sells for $3,999.
So is Gateway 2000, which will incorporate nVidia's Riva 128 in its G-Series. The line is topped by the G6-300XL, driven by a 300-MHz Pentium II processor and featuring 64MB of SDRAM, a 6.4GB hard drive, and a DVD-ROM drive. The system will cost $3,799; Gateway's lowest-priced Pentium II machine will run $2,549.
Notwithstanding Micron and Gateway, close-to-$2000 price points on Pentium II systems actually started approximately two weeks ago, when earlier price cuts by Intel began to take effect, said James Staten, an analyst at Dataquest. Third-tier clone makers started the trend by offering 233-MHz Pentium II systems with older parts for around $2,200.
Prices should continue to drop through the end of the year, which will fuel sales, Staten added. Intel is trying to move customers over to the Pentium II architecture and is expected to make further price cuts in November on Pentium MMX chips, to clear them out, and on the 233-MHz Pentium II, to entice customers to the new systems, said several sources. Advanced Micro Devices and Cyrix, both of which have recently been racking up new contracts with large system vendors, will likely follow any price actions.
"We think its going to be a strong Christmas," Staten said. "We're going to see 166-MHz Pentium MMX in the $1,000 price point by Christmas."
Matt Sargent, an analyst at Computer Intelligence predicted that low-end Pentium II configurations could reach as low at $1,700 or $1,800. Like Staten, he predicted strong year-end sales, especially compared to 1996, when customers delayed purchases in anticipation of MMX.