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PC makers announce Athlon-based systems

Compaq and IBM are putting AMD's new Athlon chip in high-end personal computers, bringing competition to this market for the first time.

Two of the biggest PC makers will put AMD's new Athlon chip in high-end models, bringing competition to this market for the first time.

Compaq Computer announced a computer built around the new processor from Advanced Micro Devices, guaranteeing a spot for the chip at the top of consumer PC lines for the first time. IBM is expected to unveil a similar system later this week.

Athlon, formerly known as the K7, is AMD's next-generation processor. Formally released today, the chip outperforms Intel's Pentium III, according to observers, and should allow AMD an opportunity to claw its way into the more lucrative performance computing segment and, next year, into workstations and possibly servers.

A Presario model from Compaq with a 600-MHz processor and a monitor will be priced at about $2,000. This will compete with similar computers that use Intel's Pentium III chip.

AMD processors have typically appeared in computers priced below $1,000. Though this is a burgeoning market segment, it is also one marked by cutthroat pricing. AMD has gained market share at Intel's expense here, but it has also suffered a string of disappointing earnings reports because of the aggressive pricing necessary to maintain its position.

But AMD's financial status didn't stop PC makers from heaping praise on the newest of AMD's chips.

"These are the best-performing machines ever," said an industry source familiar with IBM's new Aptiva models.

Compaq was also quick with accolades. "The Athlon processor significantly outperforms any other previous-generation [Intel architecture] chip," said Michael Larson, senior vice president and group general manager at Compaq's Consumer Business Unit.

A report released today from market researcher Mercury Research said: "A PC built around the new Athlon processor...scored up to 14 percent higher than an identically configured system based on Intel's Pentium III." In both cases, Mercury Research used systems with 600 MHz chips.

Interestingly, despite the high performance, IBM systems will be priced slightly lower than Intel-based systems.

Compaq models will follow a similar pricing scheme. The Presario 5861 comes equipped with an AMD Athlon 600-MHz chip, 128 MB of memory, 13 GB hard drive, a fast 3DFX graphics subsystem, and a 17-inch monitor for $1,999.

A similar Presario with a 550-MHz Intel Pentium III processor, 15 GB hard drive, a rewritable optical drive, and graphics chip from S3 is priced at $2,499.

The AMD-based system is the first model to be announced in the Presario 5800 Series and will be available within 30 days through Compaq's direct build-to-order program at retail kiosks, at the company's Web site, and via direct phone sales, the company said.

IBM's new consumer PC will use the 650-MHz version, the fastest of the AMD chips. This will ship in 20 to 30 days, according to an industry source, and is priced comparably to the Compaq system.

Support by a number of other computer companies is forthcoming also. Chipset makers including Via, Acer Laboratories, and SiS are expected to announce support for the chip. Also, a variety of PC circuit board makers, including AsusTek, are also expected to announce products.

Still, shortages could develop. Distributors have told dealers not to expect large volumes of the fastest Athlons for a while. AMD is also still working out some compatibility issues, said sources.

The 650-MHz processor itself is priced at $849 while the 600-MHz chip is set at $615. These lofty prices put AMD, for the first time, in the same price bracket as high-end Intel chips.