The 433-MHz Celeron processor, which some dealers started selling last week, is the latest bomb in the processor price war raging between Intel and Advanced Micro Devices. After losing market share to AMD and National Semiconductor in the sub-$1,000 PC market all last year, Intel this year launched a campaign to bring out faster chips sooner, and aggressively cut prices.
Today's 433-MHz Celeron, for instance, "is three-ish months ahead of schedule," said Ron Peck, director of marketing for the value PC segment at Intel. "We are going to get pretty aggressive in terms of silicon and pricing.
"This is more of a marathon than a sprint," he added. A 466-MHz Celeron and a graphics chip with an integrated 3D processor are expected during the next three months, said sources.
Although low cost is clearly a focus for both companies, sub-$1,000 systems are starting to resemble higher-end PCs.
|New Celeron PCs|
|Model||Hard Drive, GB||Memory, MB||Price|
|Dell Optiplex G1||4.31||32||$949|
|Dell Dimension V||6.4||32||$1,299|
|Gateway Essential 433c||13||128||$1,499|
|NEC ES 5200||4.3||32||$1,049|
How long the price floor will keep dropping in the PC market is shaping up as a major issue. Customers have continued to flock to sub-$1,000 and sub-$600 PCs. It is difficult to say, however, whether manufacturers will be able to keep up with this desire. "For the most part [component] prices have stabilized over the last six months," said Peck.
Intel did not cut the prices on the rest of the Celeron line today. In volume, the 433-MHz sells for $169 in the cheaper "370 PPGA" packaging and $177 in the "Slot 1" package, which is being phased out.
While Intel would typically cut prices on the rest of the line with the launch of a new processor, the company is not following that pattern today because it cut prices on these processors in February, said Peck. The current price for other Celeron chips in the less expensive 370 PPGA packaging are as follows: The 400-MHz Celeron sells for $133 while the 366-MHz and 333-MHz versions sell for, respectively, $93 and $73. The 300-MHz Celeron, a favorite chip among "overclockers," is being phased out, according to sources. These are wholesale prices. Retail prices are generally a few dollars more.
Because Intel did not cut prices, AMD will likely not change its prices on its K6-2 line of chips.