Intel Plans Quick Discount On Next P4
Company's upcoming 1.7-GHz P4 could see price cut shortly after April launch.
Dan Neel, InfoWorld.com
Friday, April 13, 2001
Early shoppers be warned: Intel plans to drastically reduce the price of its new 1.7-GHz Pentium 4 processor shortly after the chip debuts later this month, according to a company spokesperson.
The 1.7-GHz Pentium 4 will likely hit the market at around the $750 mark for quantities of 1000 chips, then it will drop in price substantially, says Intel spokesperson Seth Walker.
Price reductions will follow across all speeds of the Pentium 4 chip family as well, he says.
Intel will aggressively discount its new 1.7-GHz chip down to a mainstream price point before the introduction of a 2-GHz Pentium 4 later this year, Walker says.
For Intel, a mainstream price point for a Pentium 4 chip is a price low enough for manufacturers to build a $1200-$1500 PC around it.
A 2-GHz Christmas
Intel wants the upcoming 2-GHz Pentium 4 at a mainstream price point before Christmas.
"[Intel has] the goal to bring the Pentium 4 to all the key mainstream price points this year," Walker says. One way to do that would be to drop the floor on all Pentium 4 pricing.
Because Intel's chip prices tend to drop as the chips move further into the design cycle, the entry cost of the 2-GHz Pentium 4 will likely be less expensive than the 1.7-GHz chip's $750-per-1000-units. Intel's 1.5GHz chip debuted at $819 per 1000 chips last November.
One major drawback for Intel: Discounting the Pentium 4 processor could substantially reduce profit margins.
The Pentium 4 chip has a relatively large die size, which increases its cost over Pentium III chips and limits production. The chip is also only available with Rambus memory, which is expensive and in short supply, according to Ashok Kumar, an analyst at U.S. Bancorp Piper Jaffray.