Nearly every major PC manufacturer will release new models sporting Pentium 4 chips running at 2GHz and 1.9GHz, according to several sources. The chips will appear in high-end consumer PCs as well as in corporate desktops and workstations.
While the new PCs will increase the performance standards for desktop computers, they also will be fairly cheap, the result of a slow market for computers.
Compaq Computer, for instance, will slide under the limbo pole with a Presario 7000T desktop for $1,499. The computer will come with a 2GHz Pentium 4 processor, 128MB of RDRAM, a 20GB hard drive, a CD-ROM and a 17-inch monitor.
Dell Computer's 2GHz Dimension for the business market will start around $1,800, sources said. A basic configuration is expected to include a 2GHz chip, 128MB of RDRAM, a 40GB hard drive, a CD-RW drive and a 17-inch monitor.
At the luxury end of the spectrum, Gateway will release the Performance 2000XL, a $2,999 PC that will come with a 17-inch flat-panel monitor, an Nvidia GeForce3 graphics chip, surround speakers, and software packages for CD burning and photo editing. The company will also sell a scaled-down version for $1,999 with a 19-inch CRT monitor.
"It's the Intel blue-light special--you get 2GHz for the price of one," said Roger Kay, an analyst at IDC. "You should not only be able to get cheap Pentium 4's, but even more unbelievably cheaper Pentium IIIs as they clear those out."
In March 2000, 1GHz computers sold could cost as much as $5,999. Gateway had a $2,999 1GHz system, but it had half the memory as the company's new 2GHz system and a much smaller hard drive, and it lacked a flat-panel display and a CD-RW drive.
Credit Intel with much of the bang-per-buck improvement. A year ago, 1.13GHz chips cost $990 each in volume quantities. The 2GHz Pentium 4 will sell for $562.
Hewlett-Packard and IBM are expected to come out with similar PCs at roughly the same price levels. All companies will also offer consumers coupons for upgrading to Microsoft's new Windows XP operating system at a discount. Gateway, for example, will give out coupons that will let customers upgrade to Windows XP for $15.
The new chips will invariably prompt fresh comparisons between the Pentium 4 and the Athlon from rival Advanced Micro Devices. Since late last year, benchmark testers and reviewers have jousted over which chip provides superior performance.
With the clock-speed boost, the Pentium 4 will likely gain a slight edge, as the fastest Athlon tops out at 1.4GHz.
"You will probably find that the benchmarks will favor the Intel product," said Dean McCarron, principal analyst at Mercury Research. "You crank up the clock, you get more performance...The Pentium 4 architecture is living up to what it was designed to do, which is go fast."
Still, the two chips remain neck and neck despite the size of the megahertz gap. The chips feature very different architectures, McCarron pointed out. Athlon is designed to get more work done per clock cycle. By contrast, the Pentium 4 does less work per clock cycle but can churn more cycles per second. (Gigahertz and megahertz represent the number of computing cycles that take place in a second.)
As a result, an Athlon running at a slower speed can equal or best a Pentium 4. AMD also plans to come out with faster chips. A 1.5GHz Athlon is due soon.
The biggest advantage Intel may enjoy with the 2GHz chip is the instinctive appeal of a nice round number.
"From a marketing perspective, big megahertz numbers play," McCarron said.
Along with the PCs, consumers can expect to see more software applications tuned to the Pentium 4. Since last year, Intel has been working with developers to tweak their applications to run faster on the chip.
Intel will launch its 2GHz and 1.9GHz Pentium 4 chips at a press conference in San Jose, Calif., on Monday at 11 a.m. PDT. A number of computer manufacturers will be on hand to show off their systems.
Many of these computers will be released on the same day, according to sources. Some of the workstations, however, won't come out until the first part of September.
One issue computer makers will have to deal with is the transition to Pentium 4. In March, Intel signaled that the Pentium III would get squeezed off the desktop by the end of the year.
At the time, executives at some PC companies viewed Intel's plan with skepticism. Corporate customers liked the Pentium III, and Intel is unlikely to risk alienating this crowd, one PC executive at the time speculated.
Intel has gone forward with the plan. As a result, computer makers must make a fairly abrupt transition.
"There are a lot of details, and that is causing some problems," IDC's Kay said.