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Stakes high in PC cards

Intel and 3Com are locked in a heated battle in the PC adapter card market, and prices are dropping.

Intel (INTC) and 3Com (COMS) are locked in a heated battle in the PC adapter card market, and prices are dropping as a result.

Intel will announce shipment of two new 10/100-mbps network interface cards (NICs) intended for the mobile computer market tomorrow: a 16-bit card for current mobile users and another 32-bit card aimed at those who have feature-rich laptops. In response, 3Com announced similar models, though they won't hit the market until May.

The new EtherExpress Pro/100 cards are intended to address a portable computer market that is expected to approach 25 percent of all system sales by the year 2000, according to market researcher International Data Corporation. Intel is hoping to be ahead of a curve that may see laptops become the sole system for executives in corporate America.

"Businesses are starting to push one system per user," said Shirley Turner, product manager for the EtherExpress mobile cards at Intel.

The new 16-bit card from Intel is priced at $199 each, the same as 3Com's Fast EtherLink 16-bit card, which will debut this summer. Intel's 32-bit card is priced at $229.

3Com will undercut that price when its Fast Etherlink XL CardBus PC card debuts in May at $189 per single card. Expect Intel to drop its price accordingly.

Analysts believe that this is only the beginning of a tit-for-tat pricing cycle between these two rivals. The result will mean lower prices and more features for customers.

"3Com is definitely worried because a large portion of their business is derived from this area," said Veronica Guerrero, an industry analyst for market researcher Dataquest. "In the long run, however, this is a situation where both companies will certainly win."

3Com has 40 percent of the Fast Ethernet NIC market, according to a report by the Dell'Oro Group.

Intel's drive to lower the prices of Fast Ethernet connectivity to the desktop is based on its desire to accelerate the adoption rate for higher-speed networking technologies, which in turn, will drive the need for more processing power, such as Pentium Pro chips, to handle increasingly complex networked applications.

Intel is an investor in CNET: The Computer Network.