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Intel launches new chips
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August 24, 1998: 2:47 p.m. ET
Chip maker revamps low-cost Celeron, unveils 450 MHz Pentium II
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NEW YORK (CNNfn) - Intel Corp. launched two new processors Monday, rounding out its 1998 lineup of chips for computers ranging from basic home systems to high-performance desktops and workstations.
Intel says the 450-megahertz Pentium II will offer up to a 10-percent boost in performance from the Pentium II 400 megahertz model.
In addition to consumer PCs, the company also will use the chip in workstations and servers aimed at the corporate market.
The chip is the third Pentium II to use a 100-megahertz "bus," meaning information is sent more quickly from the processor to other parts of the computer system. Before the 400-megahertz model was released, Intel used a 66-megahertz data path.
Entry-level computer users also will benefit from Monday's introduction of the 333-megahertz Celeron chip, formerly code-named Mendocino. With this chip, Intel restored the "cache memory" that was absent in earlier versions of the Celeron. Analysts criticized the earlier versions, saying the lack of cache memory negated much of the performance increase a faster chip could bring.
The 128 kilobytes of cache memory functions as a queue that holds instructions that are about to be executed by the processor. Without the cache memory, it takes longer for the processor to execute the tasks.
New school, home systems to come
Sean Maloney, corporate vice president of Intel's sales and marketing group, said the new products will help create an attractive new line of computers for the back-to-school and holiday markets.
"Pentium II processors... enable great systems for today and the future, while PCs based on the new Intel Celeron processors deliver a great value and help open the door to computing for new PC users," he said.
Celeron chips have been predominately used in the sub-$1,000 PC category while Pentium II chips are featured in more expensive systems, where performance is a chief consideration.
Competition is heating up
Analysts say the new Celeron will turn up the heat on Intel competitors Advanced Micro Devices Inc. (AMD) and National Semiconductor Corp.'s (NSM) Cyrix unit.
"This is going to end the vacation that AMD and Cyrix have been having at Intel's expense at the low end (of the market)," said Nathan Brookwood, an analyst with Gartner Group's Dataquest Inc. in San Jose, Calif.
Scott Randall, technology analyst at SoundView Financial Group, said the new low-cost chip definitely will create problems for Intel's competitors.
"With the launch of (Celeron), the market gets more competitive. AMD has gained a lot of share in the low-cost sector, but they had the wind at their back relative to Intel stumbling for awhile. They have some challenges ahead of them," Randall told Reuters.
The new 450-megahertz Pentium II will be priced at $669 when bought in 1,000-unit quantities while the new 333-megahertz Celeron will cost $192.
New computer systems featuring the 450-megahertz Pentium II retail for under $2,500 while a 333-megahertz Celeron system sells for around $1,700.
Intel (INTC) shares were down fractionally to 84-1/8 in late-afternoon trading Monday. 
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Intel
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