Copycat price cuts for AMD chips

Summary:Advanced Micro Devices answers Intel's Pentium 4 price reductions with discounts of its own--slicing the list prices of Athlon processors by almost half.

Advanced Micro Devices responded Monday to Intel's Pentium 4 price cuts with aggressive discounts of its own.

AMD nearly halved the list prices of its Athlon desktop chips, which range in speed from 1GHz to 1.4GHz.

AMD, for example, cut the list price of its 1.4GHz Athlon from $253 to $130, a 49 percent drop.

Meanwhile, it lopped the list price of its 1.3GHz Athlon by 46 percent, from $230 to $125. The 1.2GHz chip was cut 40 percent, from $199 to $120.

The 1.1GHz Athlon fell 36 percent, from $179 to $115, and the 1GHz version dropped 28 percent, from $160 to $115.

The AMD price cuts aim to help keep the Athlon price competitive with Intel's Pentium 4. AMD's 1.4GHz Athlon now lists for $3 less than an equivalent speed Pentium 4.

Intel cut Pentium 4 prices by as much as 54 percent on Monday, after the introduction of its 1.9GHz and 2GHz Pentium 4 chips.

But AMD's price cuts also make room for new Athlons. The chipmaker is expected to introduce a 1.5GHz desktop Athlon next month. It also recently announced a new 1GHz Duron desktop chip, which it says will ship in October.

The list price represents AMD and Intel volume prices for PC makers that buy in lots of 1,000 chips.

Actual prices can be much more fluid, especially for AMD, because the chipmaker negotiates individually with customers that buy chips in lots larger than 1,000. These customers sometimes buy more chips than they actually need to get lower pricing. They then resell what they can't use into the gray market. This can result in supply gluts, in which street prices fall well below list prices.

However, street prices for Athlon chips, as shown by the PriceWatch Web site on Monday morning, were close to AMD's new list prices. Prices on the 1.4GHz Athlon, for example, began at $107 and went up from there, while the 1.3GHz was listed for $101 and up and the 1.2GHz for $91 and up.

AMD has also recently cut prices on its desktop Duron and mobile Athlon 4 chips.

Topics: Hardware

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