Intel has cut the prices of its Celeron and Pentium 4 desktop processors in advance of the expected launch of a new 3.06GHz Pentium 4 processor in the US today.
A research note from investment bank Merrill Lynch & Co, noted that competitor Advanced Micro Devices (AMD) is expected to follow suit.
The approximate price of the new processor, Intel's first on the desktop to feature its hyperthreading technology, will be in about the mid-US$500 range, according to Merrill.
To bring slower processors in line with the new chip, the 2.8GHz Pentium 4 will fall in price from $508 to $401, and the 2.67GHz and 2.60GHz Pentium 4 processors will decline from $401 to $305, according to Intel's Web site. All prices are in 1,000-unit quantities.
Intel will also cut prices on its budget line of Celeron desktop processors. The 2.0GHz Celeron will fall from $103 to $83, the 1.8GHz from $83 to $69, the 1.7GHz from $69 to $54, and the 1.4GHz from $74 to $54, Intel said.
Prices for its families of mobile, server and workstation chips were unchanged, according to Intel.
Chip manufacturers typically cut prices when a new, higher-performing chip enters the market, to align their product lines around the premium some users are willing to pay for the highest-performing processor. The prices of AMD's lower-end Athlon XP processors will also be cut sometime soon, specifically the Athlon XP 2100+, 1900+ and 1700+, according to Merrill.
AMD had not updated its price list available on the Web as of Tuesday morning, and a representative for AMD was not immediately available for comment.