Officially going on sale February 26, the chip will "bring a brand-new user experience" to computing by improving the way 3D and video content is viewed on the Web, Intel CEO Craig Barrett said today at a press conference. Voice recognition will also improve, according to the company, as the processor contains 70 new instructions that enhance multimedia processing and video streaming.
"The Pentium III will bring some capability that you haven't had before," Barrett told an audience in the Convention Center here in the center of Silicon Valley.
Yet Pentium III computers will start below $2,000 next week, said Paul Otellini, executive vice president at Intel. Sources at Compaq said that the company will release a Presario for less than that amount, while Prosignia and Deskpro business systems will come in at the $2,500-to-$3,000 level.
"We will see a substantial number of systems below $2,000," Otellini said.
Intel is also expected to aggressively cut prices on the chip, said John Joseph, semiconductor analyst with Montgomery Securities. According to Otellini, by Christmas the mainstream PC will have a 450-MHz or 500-MHz Pentium III processor in it.
To make sure of that, Intel is setting up services to help users appreciate the chip's new capacities and give the company a way to distinguish itself from competitors. In a new program, called the Intel Web Outfitter Service, Intel will collect all of the applications and plug-ins necessary to take advantage of the enhanced 3D capabilities on a Web site.
Excite, for instance, will demonstrate a 3D browsing service called Excitextreme on the Outfitter site, which officially launches next month. "This is going to redefine the future of search. The Pentium III enables the three-dimensional spatial design of the Web service," said George Bell, CEO of Excite.
The service will eventually make its way to the majority of Excite users, he said, but for now it will only be available to Pentium III users.
The chips released next week will run at 450 MHz and 500 MHz. Although Barrett said that the 550-MHz Pentium III would be announced next week, other Intel executives said the chip won't actually be shipping until the second quarter. Sources close to the company said it should come out in May.
Pentium III Xeon processors for servers running at the same speeds will be available in March.
"For those of you who filed your stories early and wrote that we were only coming out with 450-MHz and 500-MHz versions, I expect a retraction," Barrett joked to reporters.
The new speed grades will play into Intel's ongoing battle with AMD. The rival chipmaker will next week release the its K6-3 at 400 MHz and 450 MHz.
But the K6-3 is expected to top out at 500 MHz, according to analysts, and AMD won't likely have a 550-MHz chip until the K7 appears in the second half of the year.
Still, the benefits of the Pentium III depend upon the application used, said Montgomery's Joseph. Most people won't see a huge benefit.
"It's not a huge event. It's not like the jump from Pentium MMX to Pentium II. It's more like the shift from Pentium to Pentium MMX," he said. "There is probably a 10- to 15-percent performance delta" from the new instructions, excluding the boost in clock speed.
"With something like video, [performance] doubles. Voice--big hit. Graphics--30 percent," he added. Ordinary office users, however, will only see incremental improvements.
Nathan Brookwood, an analyst at Insight 64, said that the introduction of the Pentium III will help Intel better define differences between its low-end Celeron line, the current Pentium II, and the premium-priced Pentium IIIs.
"At least you can show people that there are things that you can do with a Pentium III that you can't do with a Pentium II," he said.
Nonetheless, emphasizing the graphics extensions on the Pentium III could prove a double-edged sword for the company. AMD is currently incorporating its 3DNOW instructions on its K6-2 processors, which aren't all that different from Intel's new instructions. K6-2 machines, however, sell for much less.
What could save Intel here are low prices, relatively speaking, on Pentium III systems. Later in the year, Intel will also release the chip in a "socket" package like the Celeron that will further cut costs. The first versions of the chip will come in the expensive Slot 1 plastic box.
Along with cost-cutting, Intel will also improve the technology. A 133-MHz system bus will appear mid-year, while a Pentium III that supports high-speed memory based on the Rambus technology will appear around the same time. Toward the middle of the year, Intel will release versions of the chip containing 256K of integrated secondary cache.
Pulling out the stops
Intel's pitches for the Pentium III will be difficult to miss in the following months. The company is mounting a $300 million ad campaign to tout the processor, said Mike Aymar, an Intel vice president.
Other chip rollouts, notably the Pentium MMX, were not as well supported.
"When we got to releasing MMX, we had ten applications that you just couldn't get. [For the Pentium III], we cranked it up in order of magnitude," said Pat Gelsinger, corporate vice president of the Desktop Products Group.
One of the advantages that Intel is sure to tout is the fact that enhancements can be seen even if the user is connected across a phone line. Both Barrett and Aymar mentioned several times that the Pentium III can process multimedia data better than the Pentium II. As a result, 3D images from distant Web servers are crisper than on Pentium II computers.
"Without the enhancement, you get the kind of gritty text that you can't read," Aymar said.
The Pentium III will also ship with its controversial serial number feature, although it will be "turned off," Aymar added. The feature was added to improve asset tracking as well as make electronic commerce more secure, he said.
Privacy groups believe that the identification system will potentially allow companies and even law enforcement agencies to track where individuals go on the Internet.
Seeing opportunities in security feature
Both game applications and business uses were touted in San Jose. Many business applications are taking advantage of the serial number feature.
For instance, Computer Associates unveiled a toolkit that allows information systems managers and software vendors to manage the Pentium III chip's identification system.
The toolkit is an extension of CA's Unicenter TNG framework and allows businesses to manage their assets and software vendors to fight piracy and verify their software licenses, said J.P. Corriveau, CA's senior vice president of advanced technology.
"In a multiprocessor box, it not only tells you the processors' serial numbers, if one gets taken out, it lets you know that. It gives you evidence of theft and fraud," he said.
IS departments can also use the CA toolkit for security, Corriveau said. CA can monitor whether an outside user is trying to hack into the corporate network, he said. The toolkit is available for free download from CA and Intel's Web site.
Voice recognition boosted
Intel's partners waxed glowingly about voice recognition. In particular, several speech recognition companies were demonstrating their wares, including representatives from Philips, who claimed applications get a big boost from Pentium III.
Pentium III voice recognition products benefit from the increased horse power, according to Matthew van Vleet, director of marketing communications for Philips, enabling more applications at one time and shorter training time. But it is unclear whether the new chip increases voice recognition accuracy.
"When you have all that processing power, it kicks it up a bit," van Vleet said.
News.com's Stephanie Miles and Wylie Wong contributed to this story.