Pentium 4 Bested By Pentium III In Business Apps
(11/20/00, 6:56 p.m. ET) By Mark Hachman, TechWeb News
The verdict is in: While Intel Corp.'s latest Pentium 4 offers superior multimedia performance, the Pentium III is still the best chip for business applications.
Analysts and hardware review sites gave their stamp of approval to the chip as a gaming microprocessor. But the 1.0-GHz Pentium III actually outperformed a 1.4-GHz Pentium 4 on common business applications, they found.
Furthermore, analysts said, few need a 1.4-GHz Pentium 4 -- or a 1.0-GHz Pentium III, for that matter -- to run a word processing program. Without a performance advantage, the Pentium 4 will likely be restricted to only the consumer market.
"It runs Office fast enough," said Dean McCarron, analyst with Mercury Research Corp., Scottsdale, Ariz. "And for a Quake head, yeah, [the Pentium 4] makes a lot of sense."
On a test system running id Software Inc.'s popular game, Quake 3, the 1.5-GHz Pentium 4 returned a frame rate of 168.7. A 1.0-GHz Pentium III, meanwhile, scored 121.4 fps -- a 39 percent improvement. Mercury tested the chip itself and posted the results on its consumer-oriented website, www.themeter.com.
Using the WinBench 2000 benchmark, which tracks performance under a business-class environment, the Pentium 4 chip only slightly edged the Pentium III using 3-D-oriented applications, Mercury found.
In 2-D applications, however, the older Pentium III outperformed the Pentium 4 by 28 percent, even though the newer Pentium 4 supposedly is a third faster on clock speed alone.
"For today's buyer, the Pentium 4 simply doesn't make sense," wrote Anand Lal Shimpi, a reviewer that runs the AnandTech website [www.anandtech.com]. "It's slower than the competition in just about every area; it's more expensive; it's using an interface that won't be the flagship interface in six to nine months; and it requires a considerable investment outside of the price of the CPU itself."
Shimpi and others pointed out that Pentium III is cheaper; a 1.0-GHz chip costs $465, after Intel's price cuts at the beginning of November. As previously reported, the Pentium 4 costs $819 and $644 for the 1.5-GHz and 1.4-GHz versions, respectively. OEMs must also buy more expensive Direct RDRAM memory, which at retail costs about $240 more than SDRAM for a 128-Mbyte module, analysts noted.
Still, the chip will appeal to some segments of the computing population.
"Dell (stock: DELL) has been and always will sell the latest microprocessor in commercial PCs," said Neil Hand, director of marketing for Dell Computer Corp.'s Optiplex line, at last week's Comdex show in Las Vegas. "Commercial users have spoken. They're interested in performance improvements, and that won't slow down."
Wall Street was surprisingly quiet on the announcement of the new chip, although Intel (stock: INTC) stock fell a slight 1 percent to close at $41.13.
However, Wit Soundview analyst Scott Randall knocked down the firm's recommendation from "strong buy" to "buy," reducing his estimates for Intel's gross margin and earnings.
"Although we view today's launch of the Pentium 4 as an important addition to Intel's 32-bit product line, we believe a combination of large die size and initial exclusive reliance on RDRAM will reduce both the competitiveness of the processor and impact [gross margin] contribution," Randall wrote. "Although we would not be dismissive of the press coverage and investor interest the Pentium 4 could generate, we also believe that benchmark results for systems based on the Pentium 4 will show uneven performance gains."
But Charles Boucher, an analyst with Bear Stearns in San Francisco, saw the announcement as a positive move for Intel, Santa Clara, Calif.
"We believe that the introduction of the P4 is significant, as Intel essentially releases its first new architecture since the Pentium Pro and regains performance leadership in the desktop microprocessor market," Boucher wrote in a note Monday morning. "We believe this will ultimately alleviate erosion of corporate ASP due to aggressive pricing on the Pentium 3 and place increasing pressure on the competition in the high performance desktop space."
Analysts differed over the effects on Intel's business through the first half of 2001.
Randall, like SG Cowen & Co.'s Drew Peck, predicted that a price war will break out in the PC microprocessor space. Randall said Intel's x86 average selling price would drop about 1 percent sequentially to $207.00. Boucher, however, felt that any near-term declines in Intel's margins or stock price would be alleviated by increasing demand during 2001. |
