The 500-MHz Celeron will power systems priced at around $1,000 from such companies as Compaq Computer and Hewlett-Packard. These will be some of the cheapest and most robust PCs to debut at this price and the strongest evidence to date of Intel's push to establish the Celeron as a high performance, low-cost chip as the Pentium II processor is phased out.
The 600-MHz Pentium III, meanwhile, will appear in workstations and high-end PCs from companies like SGI and Intergraph. Previously, Intel's fastest Celeron ran at 466 MHz and the Pentium III topped out at 550 MHz.
Analysts concluded Intel's aggressive pricing on Celeron would expand the chip beyond the low-cost consumer desktop and into the mainstream commercial PC space.
"The danger of the segmentation has always been the overlap, where the low end of the Pentium III and the Celeron collide," said Kelly Spang, analyst with Technology Business Research. "If you're a small business owner and you care a lot about megahertz, Intel is certainly meeting the megahertz treadmill with Celeron."
AMD's new chip has been praised by analysts, but some wonder if the company can conquer its past manufacturing problems.
AMD processors have been popular in low-cost consumer PCs, a space where Celeron also plays. But the new Celeron is also winning acceptance on the corporate desktop, an area where it has been largely absent.
"We are seeing more of an acceptance of Celeron in the [corporate] platform," said Will Townsend, Compaq's manager of Deskpro platform marketing. Part of that has to do with performance increases that have helped Celeron shake its image as a "low-feature processor without the cache," Townsend explained.
Both Compaq and Hewlett-Packard announced consumer PCs with the 500-MHz Celeron priced at just above $1,000, in their Presario and Pavilion lines respectively. The HP Pavilion 8560C, for example, packs the Celeron chip, 96MB of memory, a 12.7GB hard drive, an internal HP CD-Writer drive, and a modem, for a street price of $1,099.
Quantex, a smaller PC supplier, is offering a system for $999 that includes the 500-MHz Celeron chip, 64MB of memory, a 17-inch monitor, networking, and 40x CD-ROM drive.
The Celeron is used in less-expensive systems because it is not as fast as the Pentium III. In addition to the faster, 600-MHz speed of the Pentium III, it comes with a number of other performance enhancing features such as more on-chip memory.
Analysts say the Celeron is plenty for most people. "It's how you want to spin it and who's going to swallow it. If they're going to retire the Pentium II and the Pentium III is the high end, then a lot of people don't need all that power on the desktop, especially if you're a business user," said Laurie McCabe, analyst with Summit Strategies.
Internet connection speed may be the more critical requirement for some users. "The real issue...is more one of [communications] bandwidth than processor power," McCabe said.
More upscale systems using the Pentium III 600-MHz chip include a Compaq Deskpro business desktop PC starting at $2,239 with a 17-inch monitor.
Compaq also refreshed its workstation line with the Pentium III. The AP200 and AP400 systems starting at $2,671 and $2,699 respectively and include 128MB of memory, 9.1GB hard drives, and high-end Matrox 3D graphics chips.
IBM updated its PC 300PL business desktop with the 600-MHz Pentium III chip, priced at $1,895. The company is also adding IntelliStation M Pro workstations priced as low as $2,249. Along with all the new hardware, Big Blue unveiled Net-based "e-support" services, called the IBM PC Lifecycle Care program.
SGI's model 320 Visual Workstation also sports the Pentium III processors. New models start at $4,299 and include 128MB of RAM, a 6.4GB hard drive, and SGI's proprietary Cobalt graphics chipset.
SGI also used today's Intel processor rollout as a platform to launch its first server based on the Windows NT operating system, nearly eight months from the release of its first Windows-Intel workstations. The 1400M server supports up to four Pentium III processors and starts at $8,945 with a single 500-MHz Pentium III processor, 256MB of memory, and a 9GB hard drive.
HP likewise introduced a new Windows NT system, the Visualize P600 workstation, which starts at $3,300 with the 600-MHz processor. HP also reduced prices on existing systems by up to 13 percent. The Visualize P500 now sells for $4,060 for a 500-MHz Pentium III workstation with 128MB of RAM, a 6.2GB hard drive, and a Visual fx2+ graphics accelerator.
Intergraph rolled out its ViZual workstations and InterServe servers with Intel's new Pentium III processors at 600 MHz. The new Windows NT-based systems are available immediately with prices starting at $3,149 for the TDZ 2000 GL2 workstation and $4034 for the InterServe 90.
The new Intel processors are expected to lead to price cuts on other systems using older chips. Intel has priced the 600-MHz Pentium III at $669 in lots of 1,000 and 500-MHz Celeron for $167.
Dell nipped under Compaq's aggressive pricing with a $1,027 Celeron and $1,998 Pentium III system. The 500-MHz Celeron-based OptiPlex GX100 features 32MB of RAM, 4.3GB hard drive, 4MB of video memory, and 15-inch monitor. The 600-MHz Pentium III OptiPlex GX1 comes with 64MB of RAM, 6.4GB hard drive and 17-inch monitor.