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Classic Pentiums take low end

Intel's February price reductions moves "classic" non-MMX Pentiums to the bargain basement.

Intel (INTC) Pentium price cuts will move many systems with "classic" Pentiums to prices below $1,500 and establish a price gap between classic Pentium PCs and MMX Pentium PCs of roughly $400 at the high end.

Today's Intel price cuts were as steep as 35 percent for classic, non-MMX Pentiums, while MMX Pentium prices remain relatively high. This means that systems using the classic 166-MHz Pentium will sink precipitously in price in the coming months while 200-MHz MMX systems will rest comfortably at the high end.

Currently, classic 166-MHz systems from top-tier vendors are generally priced in the $1,500 to $2,000 price range. But Intel's price cuts will accelerate a trend, which began at the end of last year, toward the $1,000 mark for some systems, according to Dean McCarron, a principal at Scottsdale, Arizona-based Mercury Research, a marketing-research firm.

"They're moving the [classic, non-MMX] 166 Pentium to the really high-volume market. They're setting this up as the new low-end processor," said McCarron.

Price cuts for Pentium chips
166-MHz Pentium
133-MHz Pentium
166-MHz MMX
166-MHz MMX
133-MHz MMX

This will make the price gap at the high end between the classic 200-MHz Pentium PC and 200-MHz MMX PCs is generally between $350 and $400. For example, a fully-configured IBM Aptiva with the MMX processor is about $2,500, while the Aptiva without MMX is about $2150.

Those purchasing systems can expect these price reductions to translate into PC price reductions in as little as two weeks or as much as two months depending on the PC vendor, said McCarron. Gateway 2000, for one, might be able to roll the new chip pricing into system pricing in less than a month, McCarron said.

Intel is an investor in CNET: The Computer Network.