Pentium prices low on Christmas spirit

Chip maker enters the festive season with European Pentium II campaign, but will keep prices high until after Christmas.

Intel is expected to keep cutting the prices of its Pentium IIcampaign, but will keep prices high until after Christmas. processors, but not until the end of January 1998, prompting questions that it is seeking to capture a Christmas market.

A source close to Intel revealed that at the end of January next year, the Pentium II will be positioned as an entry-level processor, which means that people who buy computers before Christmas this year will be disappointed barely three weeks after taking delivery of their hardware.

He said: 'There will be a major price adjustment at the end of January and the next one will be at the end of April. The Q1 prices will be very aggressive and part of a plan to ramp the PII. It will really position the PII at every level of the market.'

While Intel will sell MMX processors in the first quarter of 1998, sales will tail off at that point as the ceramic processor becomes obsolete.

The source added that Intel was to introduce a Pentium II processor in a scaled down format which will fit into Net PCs. 'It will make the package very small,' he said, adding that the idea was to ensure Intel could deliver the form factor that PC manufacturers wanted to compete with the NC platform.

An Intel representative said the manufacturer would not comment on its future plans.

Last week, Intel slashed its PII prices. It has also begun a fierce advertising campaign in Europe to promote the Pentium II for games machines. The price-cutting campaign began in the US and later moved to other continents.

The decision by major PC manufacturers to move to build-to-order and configure-to-order models has begun to bite into Intel's revenue and looks likely to become a thorn in its side (PC Dealer, 5 November).