Intel Price Cuts Run Deep

Intel, the world's leading microprocessor maker, routinely slashes prices to drive demand for new products and fend off competition from AMD, but the company's latest price cuts are unusually large; certain chips fell in price more than 50 percent. This weekend, Intel announced its new microprocessor price list, which includes steep price cuts all around but especially for the company's new Mobile Pentium 4 Processor - M (Pentium 4M) chips, which haven't sold as well as expected.

On the desktop front, Intel reduced the Pentium 4 2.4GHz microprocessor 29 percent, from $562 to $400; the 2.26GHz and 2.2GHz chips fell 43 percent, from $423 to $241; and the company reduced other Pentium 4 desktop chips as much as 32 percent.

Intel's mobile microprocessors experienced even bigger reductions. The Pentium 4M 1.7GHz chip fell 53 percent, from $508 to $231, and the 1.8GHz version fell 48 percent, from $637 to $348. Intel reduced the 1.6GHz Pentium 4M microprocessor 51 percent, from $401 to 198.

Major PC makers such as Dell, Gateway, Hewlett-Packard (HP), IBM, and others will probably drop PC prices soon to reflect lower chip costs. Such a move would reverse a short-term PC price hike that occurred earlier this year because of rising memory and LCD-screen costs.

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