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To: FJB who wrote (2320)	11/18/1997 5:48:00 PM
From: Maverick	Respond to of 6843

Analysts Say Intel Price Cuts Boost Pentium II Chip By Samuel Perry PALO ALTO, Calif. (Reuters) - Intel is continuing an aggressive price-cutting program into 1998 as it entices customers to buy its latest Pentium II computer chips, analysts and industry sources said Monday. Intel officials would not comment on future pricing plans, but an analyst said the world's biggest computer chip maker has begun notifying its customers about them. Analysts said the price cuts signal Intel will not be complacent about fresh competition from Advanced Micro Devices and Cyrix. Santa Clara, Calif.-based Intel makes the microprocessors that are the brains of personal computers used in more than four out of every five PCs sold worldwide. Analysts said Intel's relatively aggressive price cuts -- it slashed prices in half on some chips in August and cut the price on certain chips by up to 40 percent Nov. 1 -- are designed to move customers to its Pentium II chips as it speeds up production of the new products. Cowen & Co. analyst Drew Peck said he has turned neutral on Intel, citing uncertainty extending through the first quarter of 1998 over how much pricing inducements and unprecedented advertising will cut into financial results, and whether they will generate sufficient demand. Peck said large customers told him Intel is already cutting deals significantly below price levels it expects to introduce Feb. 1, when, for example, the 233-megahertz (MHz) Pentium II will be reduced to $300 each. "My understanding from some of Intel's large customers is that they will be getting deliveries of Pentium II 233s well before Feb. 1 at prices well below the $300," he said. Such reductions and a consumer advertising blitz aim to generate demand for the new chips because they represent a less dramatic technological improvement over their predecessors than previous chip families, Peck said.