Intel Makes Latest Round Of Price Cuts

The chip maker cut the list price of its 2.2GHz Pentium 4 to $423 from $562 in 1,000-unit quantities. The pricing action took effect April 14.

While some believe the new pricing may be enough to jump-start additional sales to the white-box channel, others are less concerned with price than with the availability of Intel's processors and motherboards.

"Intel has a significant problem right now," said Brian Bergin, president of Terabyte Computers, a white-box manufacturer based in Boone, N.C. "It's hard to get stock on anything." It's particularly tough to get Celeron and other Intel motherboards, he said.

"We've had to go to gray market [sources and open sourcing just to find these," Bergin said. "It's become a big problem."

Intel executives acknowledged recently that the vendor is still under pressure because of product availability problems but said the issue is being addressed.

The latest price cuts were not entirely unexpected.

Earlier this month, Intel rolled out its highest-end Pentium 4, at 2.4GHz, and priced it at $562. Yet the pricing rollbacks went further down the processor line, according to a new price list published by Intel.

The price of the 2AGHz Pentium 4 was reduced to $284 from $364, a 22 percent rollback; the 2GHz Pentium 4 was cut to $262 from $342, a 23 percent drop; and the 1.9GHz Pentium 4 was cut to $225 from $241, a 7 percent decrease. All prices are based on 1,000-unit quantities.

Some Pentium III desktop processor prices were slashed by 32 percent, and the company also cut prices on several of its processors geared at mobile devices.

Intel also reduced prices on its Xeon chips for servers. The price of the top-of-the-line 2.2GHz Xeon for servers and workstations was cut to $465 from $615, a 24 percent decrease, while the 2A- GHz Xeon dropped to $305 from $417, a 27 percent decline.

The price of the LV/ULV Mobile Pentium III, at both 866MHz and 850MHz, was dropped by 24 percent, to $241 from $316. And the price tag of the same processor at 800MHz was reduced to $198 from $241, according to Intel.

As is generally the case with Intel's pricing moves, Intel spokespeople were not available for comment. In the past, sources at the vendor have said only that the company adjusts its pricing from time to time based on market conditions.