Intel Offers a Peek at Pentium's Future

Intel will cut the prices of its Pentium 4 processors an average of 26 percent by September 1, six weeks earlier than expected, according to a research note from Salomon Smith Barney Holdings distributed Monday. Also, the Santa Clara, California, chip maker confirmed the product road map has been accelerated for upcoming Pentium 4 chips.

The price of higher-end processors will be cut earlier to coincide with the launch of the 2.8-GHz Pentium 4 on August 25, says Jonathan Joseph, an analyst at SSB, in the e-mail note. An Intel spokesperson says that the release of the chip will occur in the third quarter, declining to confirm the August 25 date.

Intel's 3-GHz Pentium 4 processor will also be released ahead of schedule, in time for PC manufacturers to include the chip in their fourth-quarter holiday-season products, says George Alfs, a spokesperson for Intel. "Our manufacturing execution continues to be excellent, and we're very pleased the 3.0 processor will be available for the holiday selling season," Alfs says.

Supply and Demand

The early 2.8 GHz launch might signal that Intel is concerned about demand for its chips in September, an important buying period for chip makers, Joseph says. The 2.8-GHz Pentium 4 had been scheduled to appear in the fourth quarter of this year.

The fastest current chip in the Pentium 4 lineup, the 2.53-GHz processor, will have its price reduced 63 percent, while the low-end 1.8-GHz processor will get a 13 percent price cut, he says.

Joseph attributes the price cuts to Intel's desire to stimulate demand for its chips heading into the holiday buying season, one of the most lucrative segments of the year for Intel and its rivals.

Intel's policy is not to comment on formal price changes, Alfs says.

Alfs also confirms that Intel will release a 2.2-GHz Pentium 4-M processor for notebook computers later this year.