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Intel cuts Pentium prices
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August 23, 1999: 6:16 p.m. ET
Chipmaker slashes prices to boost PC demand as it faces new competition
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NEW YORK (CNNfn) - Intel Corp. cut prices on its Pentium III processors as much as 41 percent in an effort to fuel demand for personal computers during the upcoming holiday shopping season.
The world's leading chipmaker made the price cuts effective Sunday, just three weeks after the company introduced a 600-MHz Pentium III chip.
Chuck Mulloy, an Intel (INTC) spokesman, said the moves were in line with previous cuts after the company introduces a new product. He also said Intel had informed PC manufacturers of the price cuts "several months ago."
Intel dropped the price of the 550-MHz Pentium III to $487 from $658, a 26-percent cut in 1,000-unit quantities. The company cut the 500-MHz model 41 percent to $251 from $423. The 450-MHz Pentium III is now priced at $183, down 20 percent from $230.
"We're trying to position the Pentium III processor as an attractive option for OEMs for the holiday buying season," Mulloy said.
A large part of that effort stems from the fact that Intel now has competition in the high end of the PC market from Advanced Micro Devices Inc. (AMD), which unveiled its Athlon chip earlier this month.
Intel already has done considerable damage to AMD's profits by way of a price war between the two firms in the low-cost PC market. An AMD spokesman said the company has no plans to cut prices on its Athlon chips in response to Intel's move.
AMD priced its 550-MHz Athlon chip at $449 in 1,000-unit quantities, while the 500-MHz model costs $249.
Intel priced it new 600-MHz Pentium III chip at $669; AMD's 600-MHz Athlon chip costs $615.
Intel shares rose 3 to close at 82-15/16. AMD shares climbed 15/16 to 19-3/16.
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