Intel Corp may chop the price of the Pentium 4 processor in April and May by a total of as much as 57 percent, as the biggest chipmaker brings its fastest products to cheaper computers, an analyst said.
Intel is planning two rounds of price cuts that will reduce prices by a combined 12 percent to 57 percent, with the steepest moves at the high end of the lineup, Robertson Stephens Inc analyst Eric Rothdeutsch said.
The chipmaker introduced the Pentium 4 in November 2000. The Santa Clara, California-based company is now trying to bolster the appeal of the 2GHz and faster models for business applications, Rothdeutsch said. If demand remains strong, prices could level off and only "minor cuts" would be needed for the remainder of the year, he said.
"Intel is trying to drive their fastest products into the mainstream commercial desktop," Rothdeutsch said.
He rates Intel shares "market perform" and doesn't own the stock personally.
Chip prices have declined over the past year, as slow economic growth hurt computer sales and Intel replaced the older Pentium III lineup with the Pentium 4. The cost of a 1.5-GHz Pentium 4 -- which debuted at US$819 -- has dropped 84 percent to US$133.
Salomon Smith Barney analyst Jonathan Joseph also expects cuts. He predicted in a note to clients some lower laptop-chip prices in March and then desktop-computer reductions in April. He didn't give specific figures.
Rothdeutsch said Intel will start selling a 3-GHz Pentium 4 in the first quarter of next year.
Intel will offer 1.7-GHz to 2- GHz Celeron chips for inexpensive systems by year end, he said.
RSS