Intel unveiled its new, faster computer chips and cut prices on some existing products in the face of the biggest slump ever in the personal computer industry.
The company introduced a new chip operating at 2GHz and cut prices on its earlier Pentium4 line, which will bring some of the recent Intel-equipped computers below the US$1,000.
The company also previewed a low energy laptop computer chip and Pentium 4 chips for portables.
Advanced Micro Devices (AMD), Intel's main competitor, immediately announced their own discounts, slicing in half their prices for their 1GHz to 1.4GHz chips.
"While innovation can sometimes be hard to predict, it is critical for our industry to drive forward-looking platform architectures that enable new capabilities," said Louis Burns, an Intel vice president. "The Pentium 4 processor is an example."
The announcement came at the Intel Developer Forum in San Jose, California, the heart of Silicon Valley.
The conference includes discussions on technologies that allow these new, faster chips to pass data quickly among computer components, including the Arapahoe, which promises to speed data transfer to peripherals. Engineers will also be getting a first look at InfiniBan, a faster computer networking protocol.
Intel also is highlighting its next generation chips destined for cell phones and hand-held computers.
The event comes at a particularly rugged time for Intel and other technology companies, as a continued economic slump hits the computer world hard.
Analysts have issued ho-hum responses to this weeks faster chip announcements.
Earlier this month, IDC, the prestigious technology market research firm, reported that PC sales declined for the first time ever this year.
The company is predicting that the worldwide market for computers will fall from a high of US$50.3 billion in last year, to US$38 billion this year. PC sales will not recover until at least 2005, according to the forecast.
Intel's new 2GHz chip is priced at US$562 with a 1.9 GHz version at US$375. But it cut prices to US$133 for Pentium 4 chips up to 1.5GHz in a move to help stimulate sales of lower-prices PCs.
Chips now being sold by AMD will cost from US$115 for the 1.1GHz model to US$130 for a 1.4GHz Athlon processor.
Intel still sees signs of recovery in chip industry. Speaking to analysts at the company's development forum in the US, Burns, who oversees Intel's desktop computer products program, said that demand for the company's products is showing "signs of coming back" to more normal levels.
He also said the introduction of faster versions of Intel's Pentium 4 chip coupled with the release of Microsoft Corp's new Windows XP operating system should provide both businesses and consumers with "a real reason" to upgrade their computers. Burns said Intel plans on pouring on the speed to end the PC slump, with the speed of the current Pentium family increasing over the next few years to up to 10GHz.
"It will get faster and faster and will remain the fastest [processor] on the planet," he said.
But analysts believe the speed game holds little appeal for most consumers.
An analyst with AG Edwards said, "The Internet, e-mail, and word processing can be achieved with computers people have now. There's nothing really compelling to make most users rush out and buy a faster machine."
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