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Tuesday, October 19, 2004
Intel whacks mobile chip prices

Intel cut the prices of its premier mobile chips by up to a third on Sunday, as it prepares for the holiday season.

The Santa Clara, Calif.-based chipmaker introduced lower prices on its Pentium M processors and on its Centrino bundle, which includes a Pentium M processor, a chipset and a Wi-Fi module. More than half of all notebooks based on a Pentium M chip contain the full Centrino package.

The cost of the high-end Pentium M 755, which runs at 2GHz and contains 2MB of cache, dropped almost 34 percent, from $637 to $423. The Pentium M 745, which runs at 1.8GHz, was sliced from $423 to $294.

Centrino bundles based around the 755 chip were knocked down 30 percent, with the top price falling from $706 to $695 and the bottom price from $495 to $481. The price tag on the bundle varies depending on its type of chipset--a piece of silicon that controls the flow of data to the processor.

The price cuts follow a ziggurat pattern typical of Intel: A faster chip takes on the former price of the processor just below it. This usually means that Intel plans to release a chip in the relatively near future that will debut at the old price of the former fastest processor. These changes typically translate to lower notebook prices.

The predictability of this weekend's price drops is a sign that Intel is fairly confident about its market position in notebooks. In the past, the chipmaker has discounted its products at a much more rapid rate when losing market share to rivals.

Analysts believe that Intel has recently lost ground in desktop chips to Advanced Micro Devices. However, Intel said in the third quarter it shipped a record number of notebook chips, an area in which AMD is not nearly as strong.

The discounts also covered low-end Pentium M processors. A 13 percent cut for the 1.6GHz model pushed the price down from $241 to $209. More details on new Intel prices, which are for chips purchased in 1,000-unit lots by PC makers, can be found on Intel's Web site.

AMD is expected to release high-end chips for gamer desktops this week.


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