Intel hopes new chip will spur sales

The 3GHz chip, which will appear on desktops from nearly every major manufacturer this week, enhances performance in two ways. It runs at a higher clock speed than other chips on the market and comes with a technology known as hyperthreading, which allows a chip to tackle multiple tasks simultaneously.

Overall, hyperthreading--already included on the Xeon line of chips for servers and workstations--speeds up applications such as Adobe Photoshop by around 20 percent on Windows XP machines to more than 3GHz, said Paul Otellini, Intel's president. Computer users running two or more applications at once also experience improved performance and fewer freeze-ups.

"It is just free performance," he said.

Although some critics say that PCs contain more megahertz than necessary, the company maintains that the average desktop in the world today is beginning to wheeze. The last massive upgrade cycle occurred in late 1998 and 1999, when processors topped out at around 550MHz. Since then processor-hogging applications such as virus scanners and digital video have become more popular.

"As you move to Web services, and as you move to secure environments, these machines (bought in 1998 and 1999) can't do it," Otellini said. "Going forward, there is a fairly good argument that people are less and less prone to upgrade an existing machine."

While Otellini and others assert that hyperthreading won't ignite a buying frenzy, the benefits should help turn the heat up on the issue.

"This is one more arrow in the IT guys' quiver that they can use to convince the powers that be that it is time for an upgrade," said Mark Margevicus, a research director at consulting firm Gartner.

"Microsoft is the big winner here" because Windows XP is tuned for hyperthreading, he said.

PC makers are using the new chip in a variety of systems. Dell, for instance, is inserting the new chip into its OptiPlex corporate PCs, Precision workstations and Dimension PCs, mostly sold to small businesses and consumers.

A typical Dimension 8250 desktop includes the chip, 512MB of memory and an 18-inch flat panel and will sell for $2,999. Typical workstation configurations start at $3,599.

Gateway plans to use the chip in its high-end 700XL as well as its mid-range 500XL. At one end of the spectrum, for $3,499, Gateway is bundling a 700XL with a 3GHz Pentium 4, 512MB of memory, 400GB worth of hard drive space, DVD and CD burners, and a 19-inch flat panel monitor.

At the other end of the spectrum, the Poway, Calif.-based PC maker is selling a $1,449 system with a 3GHz Pentium 4, 256MB of memory, 60GB of hard drive space, and a DVD burner.

Eventually, hyperthreading will find its way into notebook chips and even budget PC processors, Otellini said. By the end of next year, hyperthreading will be featured in more than half of the performance desktops containing Intel chips.

Still, the technology won't be universal. To get the full benefit of the technology, an OS or an application has to be threaded, a process wherein functions are broken into smaller computing strands. Windows XP has been tuned for hyperthreading, but Windows 2000 hasn't and only a select number of applications have been threaded.

As a result, Dell and HP workstations to date have shipped Xeon-based workstation with the function turned off. Most workstation users are still using Windows 2000. HP will come out with new workstations later this month with hyperthreading turned off, a spokeswoman said. Nonetheless, users can easily turn on the function, the HP representative added.

The chip sells for $637 in 1,000 unit quantities.

Competitor Advanced Micro Devices, meanwhile, is expected to release its Athlon XP 2700+ and 2800+ processors toward the end of the month. AMD's performance figures roughly correspond to the megahertz speeds of Pentium 4 chips.