A vicious price war has broken out in the processor market after Intel slashed its prices by up to 50 per cent, forcing AMD to follow suit with swingeing cuts.
Intel?s pricing strategy means Pentium MMX chips will effectively become the entry-level processor, with chips like the ordinary Pentium 166MHz, 150MHz and 133MHz now priced at about $100.
But Graham Jackson, MD of Acer UK, saw the prices as a miscalculation by Intel. He said: ?Intel wants to push everyone to the MMX chip, but business users don?t have a requirement for it.?
He claimed the price cuts would provide an opportunity for clone chipmakers such as AMD and Cyrix to satisfy the demand for entry-level Pentiums.
The Intel price cuts, across almost its entire range of processors, mean the 300MHz Pentium II, with 512Kb cache, falls from $1,981 to $851 ? a decrease of 57 per cent. But Pentium Pro prices remain stable, reflecting the chip giant?s desire to restrict supply of the processor to high-end SMP machines.
There were major price cuts on the 233MHz and 200MHz MMX chips, which drop from $594 to $386 and $492 to $252 respectively. Entry-level Pentiums will have a restricted supply with prices for the 166MHz chip dropping from $209 to $106, the 150MHz part from $150 to $95 and the 133MHz from $134 to $95.
Richard Baker, marketing director of AMD UK, said the company had followed suit with cuts averaging 46 per cent across its line of K6 processors. The K6 233MHz now costs $290, the 200MHz $189 and the 166MHz $109.
But Brendan Sherry, MD of Cyrix Europe, was adamant that Cyrix would not adjust its prices, claiming its chips were competitively priced.
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