Over the weekend, both Intel and AMD reduced the prices of their processors, paving the way for the arrival of their new chips. Intel cut the prices of all its desktop Pentium 4 processors by as much as 21 per cent while, AMD, just a day later, cut prices on selected Athlon XP's by as much as 32 per cent.
This price reduction is the first for the two processor competitors since the beginning of this year while, it has been even longer since the last price cuts. Both AMD and Intel have had, in the past, regular price cuts but a bad spell in the PC market has forced them to focus on means of increasing revenue. It is however, claimed by analysts that they have left the cuts late but are still within their usual target, ordinarily, they look at cutting prices about once per quarter and this is about that, said Dean McCarron, an analyst with Mercury Research.
Intel's cuts were made in order to prepare the market for the arrival of the 3.2 GHz Pentium 4, expected in Q2, 2003, while further cuts upon the introduction of the chip are also expected.
Intel begun the cuts in style by reducing the 3.06 GHz Pentium 4 price by 8 per cent, from USD 637 to USD 589. They also cut 6 per cent off the price of the 2.8 GHz Pentium 4 chip, from USD 401 to USD 375.
Intel also dropped the prices of their 2.4 GHz, 2.5 GHz, 2.53 GHz, 2.6 GHz and 2.66 GHz chips by 21 per cent each.
The 2.6 GHz and 2.66 GHz chips were reduced from USD 305 to USD 241, while the 2.5 GHz and 2.53 GHz chips went from USD 243 to USD 193 and the 2.4 GHz from USD 193 to USD 163.
AMD were not quite as sweeping in their price cuts but instead tried to make strategic reductions in order to match their rivals actions. The Athlon XP 3000+ and 2800+ chips remain at USD 588 and USD 375, respectively. The prices of several desktop Athlon XP processors however, were reduced. In this way AMD are trying to make their mid-range processors, the ones that make up the bulk of the sales, more attractive to consumers and system builders.
The Athlon XP 2700+ fell from USD 349 to USD 267, a drop of 23 per cent. AMD also cut the price of the Athlon XP 2600+ chip from USD 297 to USD241, a 19 per cent reduction. The Athlon XP 2400+ price dropped 27 per cent, from USD 193 to USD 141. While the XP 2200+ chip received the record cut for the quarter by being reduced by 32 per cent, from USD 157 to USD 107.
AMD's next chip, the Athlon XP 3200+, is expected near the end of Q2 of this year at which time the company is expected to introduce further price cuts.