Intel Names New President, COO

Plans new round of Pentium 4 price cuts

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Moving quickly to define 2002 as a year of change and improvement, Intel last week tapped Paul Otellini to be its new president and COO. The move comes as the company plans to cut Pentium 4 prices again as early as next week, sources said.

Otellini's promotion follows a rough 2001 for Intel, although the company reported last week that Pentium 4 sales were brisk in the fourth quarter.

Otellini is one-half of Intel's new Executive Office, along with CEO Craig Barrett.

Next week, Intel plans to reduce prices on its 1.8GHz Pentium 4 by 16 percent to $189 and cut its 1.7GHz Pentium 4 by about the same amount to $159. Prices for the 1.6GHz processors will fall 21 percent to $129, according to sources familiar with Intel's pricing plans.

"I don't think they are going to ship too many at 1.6[GHz," said one large white-box manufacturer. "I think they are trying to make the sweet spot 1.7[GHz and 1.8[GHz." The white-box builder said he has been informed the price cuts will be effective Jan. 28.

Intel slashed Pentium 4 prices several times last year to try to regain lost market share and keep sales at seasonal levels. The vendor is predicting sales for this quarter will be flat to slightly down from its fourth-quarter total of $7 billion. It expects margins to stay at or near 51 percent, slightly up from 2001, executives said in a conference call last week with financial analysts.

Otellini, a 27-year Intel veteran who most recently was executive vice president, will join incumbent CEO Craig Barrett in Intel's new two-person Executive Office. Otellini will oversee internal operations, product development and efficiency while Barrett will take responsibility for long-range planning and corporate strategy, Intel said.

Meanwhile, Intel rival Advanced Micro Devices turned in a loss of 5 cents per share, or $15.8 million, on sales of $951 million for its fourth quarter. The loss was smaller than most analysts expected, while revenue was a slight disappointment. AMD said it expects a "slight loss" for this quarter, with revenue of just less than $1 billion.

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