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PC prices could drop $100 on Intel debut

The cost of a basic PC built around Intel components could drop about $100 later this month, after the company rolls out its long-awaited "Whitney" chipset.

The cost of a basic PC built around Intel components could drop about $100 later this month, after the company rolls out its long-awaited "Whitney" chipset.

At the same time, performance in the low end of the market should improve with the release of another Celeron processor.

On April 26, Intel will release a 466-MHz version of its Celeron, sources say, sparking the launch of new systems and price cuts on existing processors and computers. More important, the date will mark the release of the first systems based around Intel's 810 chipset, code-named Whitney, which fuses a 3D processing unit with a standard PC chipset.

Chipsets with integrated graphics functions are not new--Via Technologies released one for PCs late last year--and generally they don't provide the same level of performance that can be achieved through separate chipset-graphics solutions. Instead, their appeal comes in cost savings, which has become an obsession for both Intel and customers, said Peter Glaskowsky, graphics analyst with MicroDesign Resources.

With an integrated chipset, computer vendors don't have to install a separate graphic processor, which can cost around $10, or a port for a graphics chip. Computer vendors can also use smaller motherboards and cases, which can save another $10 or more.

The 810 will also allow PCs to control DVD drives and audio functions through software, eliminating more hardware costs, sources said. These incremental cost-cutting measures add up for manufacturers, and amount to even bigger savings by the time the PC hits the shelves.

"Now you're talking about a $100 difference in retail between [an 810-based computer] and the next cheapest Intel solution," Glaskowsky summarized.

Currently, Celeron-based machines from companies such as Emachines sell for as low as $599, or $100 more than similar machines containing an AMD K6-2 processor. Extrapolating on this math, these Celeron systems could drop to $499.

The cost savings could help the company regain some of the market share it has lost in the U.S. retail segment. Intel has conceded ground in this space for the past 12 months, and most analysts attribute the retreat to price. Via's integrated chipset is already being used to cut costs on basic PCs in foreign markets and by second-tier manufacturers in the United States.

PC makers are expected to release 810-based systems when the chipset debuts.

Other companies, including S3 and ATI Technologies are looking into releasing their own integrated solutions.

Nonetheless, performance will suffer, especially if users try to run some of the more complex 3D applications or power a high-resolution monitor. The hit on performance is a trade-off that comes both with integration and from the graphics engine Intel is using.

The 3D core of the 810 is an improved version of Intel's i740 graphics chip, which debuted last February. Although many predicted that the i740 would become a dominant component in the marketplace, companies such as Nvidia quickly released products that surpassed the i740 in performance. Accordingly, the i740 quickly fell to the bottom of the market.

While Intel has improved its 3D technology, the 810 will still pale in comparison to current or soon-to-be released graphics solutions on more expensive machines.

"It won't be able to match the performance on 'discrete' solutions," Glaskowsky said. "This would not be the right system for gaming."

Users may also experience a very slight performance hit on email or other productivity applications.

Still, users won't likely find themselves in the computing cold. A number of last year's 3D games will run fine on 810-based systems. "You will be able to run Deer Hunter, which had minimal 3D," Glaskowsky added. The performance could end up being comparable to last year's ATI Rage Pro.

"It depends how well they write the logic," said Jon Peddie, president of Jon Peddie and Associates, a Tiburon, California-based consulting firm. "It should be as good as the i740," he said.