Intel has realised it had abandoned the low end of the market, but it's new Celeron will fill the gap, according to Anabelle Bits' director Maree Lowe.
"In mid last year, Intel probably realised it had given away a large part of the market it shouldn't have," Lowe told ARN last week.
She said it was a "very good move" by Intel to introduce last week the 300MHz Celeron chip, which will compete primarily with Advanced Micro Devices' (AMD) newly-released K6-2 chip.
Intel says the chip is to meet the "core computing and affordability needs of the sub-$US1200 basic PC market". Lowe said the chip would be tar-geted at volume buyers who are "a bit more budget conscious".
"They are geared for home users and the small business market sectors," she said.
The Celeron 300MHz processor does not have an on-board cache. It is supported by the Intel 440EX AGPset, designed specifically for the low end of the market.
In 1000 unit quantities, the Intel Celeron 300MHz costs $US159 and the 266MHz version costs $US106. The accompanying MU440EX Micro ATX motherboards are also now available.
Another round of chip drops
Meanwhile, Intel released its latest round of price drops on its processors last week, while its cut-price competitor AMD has cut its prices even further.
Intel's biggest discount is on the 233MHz Celeron chip, down 32 per cent to $US106 per thousand.
The 233MHz MMX chip is down 21 per cent also to $US106 per thousand.
Other discounted chips are the PII 266MHz, now at $US198; the PII 233MHz at $US161; the PII 300MHZ at $US305; the PII 333MHz at $US412; the PII 350MHz at $US519; and the PII 400MHz at $US722.
AMD launched its K6-2 chip with a bang at the start of the month, and in line with its discount policy, it will be priced at 25 per cent less than the comparable Intel chip.