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Intel to roll out fastest notebook Pentium

The new Pentium MMX chip will run at 266 MHz and appear in new notebooks from Dell, Digital, Compaq, and Toshiba.

Intel (INTC) will announce the fastest Pentium chip yet for notebook PCs on Monday, just as the chip giant is challenged for the first time in this segment by Intel-compatible manufacturers.

The new Pentium "Tillamook" MMX chip will run at 266 MHz and appear prominently in new notebook PCs from vendors such as Dell Computer, Digital Equipment, Compaq, and Toshiba, which will next week announce new systems based on the chip, according to industry sources.

The fastest Pentium chip to date runs at 233 MHz and is used in high-end notebooks and low-end desktops.

Importantly, this may be the end of the line for the Pentium processor. Intel has not indicated that it plans any further speed upgrades for the Pentium chip. Accordingly, the company will now stake its future on the Pentium II processor.

Most notebook models with this chip are expected to be priced above $3,000.

Many will feature 13.3-inch active-matrix LCD screens and large hard drives, such as Dell's Inspiron. One of the most attractive new models to emerge with a 266-MHz chip will be the Digital Equipment Ultra 2000. At just over an inch thick and weighing a little more than five pounds, the Ultra 2000 will pack a 14-inch LCD screen, a CD-ROM drive, and a large keyboard.

The new Tillamook chip comes just as Intel is running up against its first real competition in the notebook segment. As of this week, both Advanced Micro Devices (AMD) and Cyrix are for the first time shipping processors for notebooks. Both companies' chips are featured in new notebooks announced by Compaq this week. (See related story)

AMD recently switched over to a new manufacturing process for its chips, allowing it to make smaller, faster processors that are suitable for notebook PCs.

The presence of low-cost suppliers such as AMD and Cyrix is likely to begin to drive down prices in the notebook market, shadowing what has occurred in the last 12 months in the desktop market. Notebooks have typically been priced at a large premium over desktops, but the cost of components, including screens and chips, have been plunging. Toshiba recently indicated it will come out with a low-cost notebook this year priced around $1,000 in Japan. Notebooks typically start at around $1,500, and most are priced between $2,000 and $3,500.

But Monday's unveiling is also shaping up to be a prelude to a more seminal event in the first half of this year, when Intel will announce the first Pentium II processor for notebooks. Top manufacturers such as Toshiba are expected to bring out completely redesigned, next-generation machines that offer the muscle of today's Pentium II desktops.

Intel's ultimate goal is to move all PCs to the Pentium II chip and drive down its price, so that it appears in even the lowest-priced boxes. The chip giant is also planning to come out with a special version of the Pentium II that will not be on a cartridge and incorporate high-speed memory directly on to the chip.