Hardware vendors have embraced Intel's latest high-speed Pentium II processors, but are less enamoured with its low-cost Celeron chip for sub-#1,000 computers.
More than 100 vendors launched machines based on the 350MHz and 400MHz Pentium II at Intel's unveiling event in San Francisco last week, but only 40 had models based on the $155 Celeron. Many said they had no plans to manufacture PCs using the low-cost processor - endorsing the view of analysts who believe Intel rivals AMD and Cyrix will steal a march in the consumer space.
Gateway 2000 was typical of the vendors using Intel's latest silicon, launching 11 high-speed Pentium II PCs but none based on Celeron.
'The faster Pentium IIs are great, but we will wait and see on Celeron,' a representative said.
IBM has opted to use K6 chips from AMD and older Pentium MMX processors in its budget PCs. National Semiconductor subsidiary Cyrix also plans to win business with its MII, an entry-level chip priced similarly to Celeron.
The uncertainty surrounding the StrongARM processor from Digital partner ARM - which Intel plans to use if its foundry agreement with Digital is finalised - also clouds the low-cost chip issue. Intel could eventually equip cheap PCs with StrongARM, which is cheaper, faster and uses less power than Pentium, but this would force it to switch to a new architecture.
Intel refused to comment until after the Digital agreement is approved.
Paul Otellini, Intel executive vice president, said the PC market has segmented into many groups, all requiring ever-increasing power. 'The speed of business is turning us all into power users,' he said. 'Business users switch off applications that become complex and drain system memory and performance, and consumers often demand to use DVD or 3D applications.'
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