Yousef - RE: "Okay Ali, you asked for it -->"
Since you only get what you give, here you go (with a few enhancements I thought I should put in ;) :
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Intel's low-end push pressures prices -- Intros
366-, 400-MHz Celeron processors
Mark Hachman
Silicon Valley- Intel Corp.'s renewed push to beat
Advanced Micro Devices Inc. at the low end of the
microprocessor market has resulted in a short-term buying
opportunity for PC OEMs.
Intel introduced new 366- and 400-MHz versions of its
Celeron processor last week, while separately announcing
a 450-MHz Xeon processor for four-way servers.
Intel's low-end strategy intrigued analysts, who reported
that its practices in pricing processors for low-end PCs
have been altered yet again.
In its latest price revisions, Intel seems willing to sacrifice
sales of its low-end Pentium II chips for increased Celeron
market share, supposedly cutting into sales of AMD's
competing K6-2 chip, analysts said. Intel's decision also
foreshadows the March launch of the Katmai processor,
which will pull the two families further apart in
performance.
"They're finally biting the bullet," said Ken Pearlman, an
analyst with CIBC Oppenheimer Corp. in San Francisco.
"They've given up on not cannibalizing the Pentium II."
But the price cuts worried other Wall Street analysts, who
wondered if the declines indicated that a price war raged
in the last weeks of the year, and whether the price cuts
were evidence of yet another first-quarter oversupply of
chips.
Using Intel's own tests and the iCOMP test suite, which
incorporates benchmarks from both Intel and third parties,
Intel claimed at its Web site that a 333-MHz Celeron and
333-MHz Pentium II differ in performance by only 15%.
Under Intel's latest price revision, however, the Pentium II
commands a 101% price premium in lots of 1,000 units.
At 300 MHz, the difference is even more dramatic. For just
a 12% boost in performance, Intel charges Pentium II
buyers about $353-170% more than the $90 Intel charges
for the 300-MHz "A" Celeron with 128 Kbytes of
integrated cache.
Observers say it is likely that any Pentium II below 400
MHz could be phased out by February or March, although
Intel's confidential November roadmap-altered in
December-shows only the 333- and 300-MHz Pentium II's
vanishing by February. Currently, the slowest desktop
processor Intel offers is not a Celeron, but a 266-MHz
Pentium II, which Intel sells into what it calls the
"Performance PC" segment.
"Intel's strategy, to this point, has been to use the Celeron
as the best bet to unseat AMD in the consumer market, and
sell the Pentium II to business buyers," said Linley
Gwennap, an analyst at MicroDesign Resources Inc.
(MDR), Sebastopol, Calif. "Intel's hope, at this point, is
that those buyers would turn up their nose at the Celeron.
The danger is that those buyers will notice the Celeron is
almost as fast as the [Pentium II]."
At a breakfast round table with the media last week, Intel
executives addressed those questions as part of the launch
of the company's new 366- and 400-MHz Celeron
processors.
Paul Otellini, executive vice president of Intel's
Architecture Business Group, said he was "disappointed"
with sales of the Celeron to date, adding that Intel was late
to recognize the impact of the low-cost market. However,
Otellini claimed the Celeron represented 20% of all
processors shipped during the fourth quarter in all PCs
worldwide, outselling all of AMD's processors, as of Dec.
18.
AMD, for its part, deliberately prices its K6-2 processors
against the Celeron, offering better performance at the same
price, according to a spokesman for the Sunnyvale, Calif.,
company. AMD instituted its own January price cuts: The
400-, 380-, and 366-MHz K6-2's sell for $158, $135, and
$123, respectively, in 1,000-unit lots.
Intel also intends to separate the Celeron into a low-cost
computing platform, with accompanying chipsets and
memory. The Celeron will use a 66-MHz bus and SDRAM
throughout most of 1999, said Ron Peck, Intel's Celeron
marketing manager.
Analysts said they suspect the 333-, 300-, and 266-MHz
Pentium II chips will be phased out because they, too, use a
66-MHz bus. The move to 100 MHz and its 1.06-Gbyte/s
bandwidth is a "dramatic" performance boost, according to
Peter Glaskowsky, another analyst at MDR. The
forthcoming Katmai chip will add a new instruction set,
which will not be included in the Celeron until 1999.
Intel also announced the four-way 450-MHz Xeon
processor, a chip that sells for $824, $1,980, or $3,692
when including, respectively, 512 Kbytes, 1 Mbyte, or 2
Mbytes of Level 2 cache. Prices are for lots of 1,000 units.
Copyright ® 1999 CMP Media Inc."
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Regarding the comment about Celerons outselling all AMD's processors, it doesn't really matter if that analyst is correct that AMD "sold out" their processors in Q4.
I didn't think the Camino chipset and 133 MHz bus would provide a "dramatic" boost, but if a MDR guy says so, its gotta be true. (See, I'm not completely biased against Intel ;) |
