PENTIUM 4 MAY RISE ON HALLOWEEN

September 29, 2000

COMMERCIAL NEWS

San Diego, CALIF. — John G. Spooner reports that Intel Corp. may have a Halloween treat for tech trick-or-treaters – the launch of the Pentium 4 processor for desktop PCs.

The chip maker will launch the next-generation processor for desktops in the last week of October, probably October 30, according to industry sources. Some insiders had expected the chip to ship in mid-October.

The Pentium 4 is Intel’s next-generation desktop processor. The chip, aside from a higher clock speed, will offer a faster system bus, running at 400MHz, and will be paired with dual-channel Rambus direct RAM memory.

Intel is positioning the Pentium 4 as an engine for high-end, multimedia-oriented applications, such as video editing, digital photography and gaming.

Intel will offer the chip first at 1.4GHz and 1.5GHz, the sources said. Previously, the chip maker had been expected to ship it at 1.3GHz and 1.4GHz.

Intel officials would not confirm the launch plans, saying only that the chip would ship in the fourth quarter.

The company is planning a launch event at its Santa Clara, Calif., headquarters.

The Pentium 4 will be offered by a number of large PC makers in home PCs and workstations. Hewlett-Packard Co., sources said, would offer the chip in its Pavilion line of home PCs and in its Kayak series of workstations. Dell Computer Corp. is also expected to offer the chip in its consumer line. It is likely that other large PC makers will follow suit with systems of their own.

But sources said that neither PC maker plans to offer the Pentium 4 in corporate PC lines right away. That’s not surprising – corporate IT buyers generally prefer not to venture into new technology immediately. The exception to the rule comes with workstations, where companies usually buy as much performance as they can afford.

Intel is positioning the Pentium 4 as an engine for high-end, multimedia-oriented applications, such as video editing, digital photography and gaming.

In an interview earlier this week, Carl Everett, vice president and general manager of Dell’s Personal Systems Group, would not comment on processor speeds or introduction dates. He did say, however, that Dell is looking at the chip for its corporate Optiplex desktop.

“We’re in the validation process (with Pentium 4) right now. Things are going well. It looks good right now, but it’s got to be system-ready for me to put my name on it,” he said.

Pentium 4 PCs won’t come cheap. Top-of-the-line Pentium 4 PCs, with large amounts of memory and high-end graphics, will likely cost $3,000 or more. Intel, sources said, is targeting a $2,500 price for an entry-level Pentium 4 PC.

Although PC makers set prices for their systems, Intel has some say in the pricing on initial Pentium 4 systems. The company is offering a $70 subsidy for the RDRAM that goes into each Pentium 4 PC. The company’s goal is to lessen the price of RDRAM memory, lest it stand in the way of adoption of its new flagship chip.

Intel expects initial sales of P4-based systems to come in at the high end of the market. It doesn’t expect that consumers will purchase a Pentium 4 system for word processing and e-mail. Instead, the company expects consumers to buy systems for use with multimedia applications and has been positioning the chip for those potential buyers.

The Pentium 4 is expected to be available in limited quantities initially, which will play a role in limiting it to the high-end of the market. At approximately the same time Intel ships its Pentium 4 chip, rival Advanced Micro Devices Inc, is expected to ship its 1.2GHz Athlon processor. AMD will supposedly counter Intel’s faster Pentium 4 with a more practical, cheaper approach.

By the end of the year PC makers will be able to offer Athlon systems paired with new chip sets that support Double Data Rate SDRAM, a faster version of the current memory standard, SDRAM. DDR SDRAM will be priced much lower than RDRAM.

These high-end Athlon systems are expected to be widely available and priced more aggressively than Pentium 4 systems, coming in at a price range of $2,000 to $2,500. Lending support to DDR, VIA Technologies Inc., recently announced two new chip sets that support the technology.

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