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Pentium prices to slow down

Intel is expected to drive down prices quickly for its MMX-enabled Pentium and P6 processors, while the Pentium Pro sees a more gradual pricing decline.

Intel (INTC) is expected to drive down prices quickly for its MMX-enabled Pentium and P6 processors in 1997, while the Pentium Pro will see a more gradual fall from pricing heights of 1996.

The MMX-enabled Klamath P6 processor is expected to see the most precipitous price drops in the second half of the year, even though it won't be introduced until the second quarter. The Klamath P6 is a next-generation processor, slated as a follow to the existing Pentium and the MMX-enabled Pentium that will bow in next week.

In line with standard Intel pricing practice for new processors, the introductory pricing for the Klamath P6 will be high, with the 233-MHz Klamath coming in at close to $700 and the 266-MHz version around $800, according to pricing projections in the December 30 issue of the Microprocessor Report, an industry newsletter.

But prices will fall off relatively fast throughout the year. The 233-MHz chip should dive to around $400 by the end of 1997, while the 266-MHz chip should plummet to well below $600, according to the newsletter's projections.

This means that personal computers that use these chips will initially come out at the high end, commanding prices above $3,000. But by the end of the year, those same systems should begin to fall below that mark and even below $2,500. That would make them as affordable as high-end Pentium systems today.

A smaller, faster version of Klamath, known by the code name of Deschutes and running at 300 MHz, is expected to be introduced in the fourth quarter at about $800, according to the newsletter. PCs based on this chip will take over the high end at prices above $3,000 and maybe as high as $4,000.

Meanwhile, the MMX-enabled Pentium, scheduled for a grand debut on January 8, will be priced at well above $400 for the 200-MHz version and in the upper-$300 price slot for the 166-MHz version. These prices will fall well below $300 and even $200 respectively by the end of the year.

This puts 166-MHz MMX Pentium systems at the sub-$2,000 and sub-$1,500 level by the end of the year, while the 200-MHz MMX Pentium will also be entering the low end of the pricing spectrum.

The Pentium Pro will continue to fall from its alpine levels in 1996, though probably not as dramatically as other Intel chips. The 200-MHz Pentium Pro will fall from more than $500 in the fourth quarter of this year to $400, according to the newsletter.

The Pentium Pro is expected to become popular in workstations and servers because it includes an integrated level-2 cache memory chip, important for speeding performance on data-intensive tasks.

Intel is an investor in CNET: The Computer Network.