AMD & INTC have repeatedly beat analyst earnings expectations in the face of dropping chip prices
Intel and AMD Heat Up Price Wars 10/26/98
Newsbytes, Monday, October 26, 1998 at 14:49
SAN FRANCISCO, CALIFORNIA, U.S.A., 1998 OCT 26 (NB) -- By Matt Hines,
Newsbytes. Intel Corp. [NASDAQ:INTC] and Advanced Micro Devices Inc.
[NYSE:AMD] are set to touch off the latest round of price cuts in the
microprocessor market. Intel today announced reductions for its Xeon
lineup for servers, among others, while AMD is expected to drop pricing
for its K6 and K6-2 models aimed at low-end PCs tomorrow.
Intel announced today that it has reduced its 400 megahertz (MHz)
Pentium II Xeon for use in four-way servers to $1,980. Its 450MHz
Xeon and 400MHz Xeon processors for use in one-way and two-way
workstations will now both sell at wholesale for $825. The two models
feature various memory speeds which make them attractive for
use in different applications.
In its desktop line-up, Intel cut prices on its high-end Pentium
II processors as well as on its low-end Celeron chips. The 450MHz
Pentium II model fell to $560 while the 400MHz model of the same
family dropped to $375. The Pentium II 350MHz was reduced to $375
and the Pentium II 333MHz fell to $180. In the Celeron family, the
333MHz chip went down to $159 while the Celeron 300MHz is now
available for $138.
AMD is expected to reduce its K6-2 400MHz chip to $269 with its
slower siblings following suit. The K6-2 380MHz will reportedly
market for $199 and the K6-2 350MHz processor will be cut to $150,
industry sources said.
The firms are expected to create a flurry of activity in the PC
hardware business with the most recent round of price cuts.
System manufacturers will likely reduce prices on existing models
and introduce more new low-cost PCs utilizing the chips in
preparation for the holiday buying season, traditionally
one of the strongest times of the year for consumer PC sales.
Some analysts have estimated that PCs featuring the 350MHz
Intel Pentium II will break the sub-$1,000 mark before the end
of 1998 while systems powered by AMD's processors should continue
to push the sub-$700 and even sub-$500 range.
Intel said that the price cuts announced today are part of its
continued strategy to arrange various models and product
families in accordance with current demand and upcoming technology
including a new class of desktop chips featuring the firm's
Katmai upgrade for multimedia application support
in PCs, early in 1999. Today's move helps to make room for these
newer processors. Intel officials said that low-end Pentium II
chips will continue to be phased out as the clock speeds of its
Celeron line-up continue to move upstream.
While the price reductions will affect the two companies' bottom line
they are not expected to affect the developers a great deal as demand
in the PC industry continues to grow. PC sales jumped by 10 to 12
percent this year and are predicted to grow some 13 percent next year
as sub-$1000 machines become increasingly popular.
Both companies are expected to continue to report solid growth for the
year and the quarter, IDC said. Intel and AMD have repeatedly beat
analyst earnings expectations in the face of dropping chip prices.
Reported By Newsbytes News Network, newsbytes.com |
