New Intel chip leads to new models, falling prices

Over the last two weeks, industry vendors have introduced a slew of new computers incorporating Intel Corp.'s 333 MHz Pentium II— the company's fastest chip yet— and have begun lowering prices on models with slower processors that only a few months ago were the latest thing.

The faster processors will give those PCs better support for imaging and multimedia applications such as graphics,

3-D, interactive digital video disc and other data-intensive programs, according to vendors.

Nearly all the top PC vendors have unveiled new desktops or servers that will be added to the General Services Administration schedule.

The list of new desktops and servers includes such lines as Compaq Computer Corp.'s Deskpro, Dell Computer Corp.'s Dimension and Optiplex, Hewlett-Packard Co.'s Vectra VL, Micron Electronics Inc.'s Millennia and ClientPro, and NEC Corp.'s PowerMate.

While some analysts say the step up from a 300 MHz Pentium II is trivial, the new processor will run typical applications 10 percent faster than the lower-speed chip, according to Intel.

New Chip Technology

But the most significant change with the new chip is Intel's first use of 0.25-micron process technology in a Pentium II processor, said Roger Kay, an analyst at International Data Corp., Framingham, Mass.

The 0.25-micron measurement denotes the width of the transistor circuit lines used in the chip. Narrower circuit lines makes it possible to develop faster chips that use less energy and dissipate less heat, according to Intel.

"This technology is extremely helpful in trying to squeeze the last watt of power out of the processor," said Will Swope, the vice president of marketing for Intel's business products group.

The smaller width also increases the number of processors that can be made from a single silicon wafer— a key to reducing the unit price.

Most of Intel's older chips used 0.35-micron technology. With its move to 0.25-micron technology, Intel said its factories are geared up to produce enough of the chips to make volume sales at discount prices.

Like previous Pentium II chips, the 333 MHz is built on a dual independent bus architecture, which makes it possible for the processor to access data from either of its buses simultaneously and in parallel — thereby reducing bandwidth bottlenecks— rather than in a single sequential manner, the company said.

Pentium II chips with even faster clock speeds are expected before the middle of the year, and a redesign of the bus architecture also is anticipated.

According to IDC's Kay, the new bus architecture is "a fairly important part" of Intel's long-term plans. The new architecture is expected to include a faster "front-side" bus. The front-side bus speed, currently 66 MHz in the Pentium II, is important to users because it deals with the transfer of data from the hard drive and other peripherals to the processor.

Falling Prices

The price of the 333 MHz Pentium II is $722 in 1,000-unit quantities, which is about $50 less than Intel's projection of about six months ago and $16 less than the 300 MHz chip when it was announced last year.

Additionally, Intel dropped prices of all other processors when it announced the 333 MHz chip, "and the lower you go, pretty much the higher the drop," Kay said.

Swope said the drop across the board means that the slowest processors "drop off," and older processors in the market are priced to move at high volumes. Manufacturers have responded.

Gateway 2000 Inc., for example, announced a 21 percent decrease in prices on select PCs, including a desktop model equipped with a 266 MHz chip for less than $2,000. Reductions on the slower chips also helped move Gateway's E-1000 managed PC for networked environments to less than $1,000.

Compaq dropped prices up to 18 percent on its Deskpro line shortly after the 333 MHz chip was announced, and it said five Deskpro models equipped with slower processors now cost less than $1,000.

Dell and Hewlett-Packard have introduced workstations incorporating the 333 MHz chip. The Dell WorkStation 400, launched last July, now is available with one or two 333 MHz Pentium II chips, and Hewlett-Packard said it plans to integrate the 333 MHz processor into its entire line of Kayak PC workstations.


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