The chipmaker lopped as much as 38 percent from the price of its desktop Celeron and Pentium chips this week. It made smaller cuts, up to 24 percent, on its mobile Pentium III processor.
The cuts, scheduled in advance by Intel, are designed to help Intel keep pace with the markets served by the chips, an Intel representative said.
Intel introduces its Celeron chips, for example, at relatively low prices. Typically, a desktop Celeron chip starts around $150 and moves down the pricing ladder quickly. The 850MHz Celeron, introduced in early April at $138, was cut by 38 percent to $86 in the latest price moves. The 800MHz Celeron fell 20 percent, from $93 to $74. The company also dropped prices on its 667MHz, 700MHz, 733MHz and 766MHz Celeron chips by between 7 percent and 16 percent.
Analysts were not surprised by the cuts. "There are many good reasons for Celeron to be cheaper," said Dean McCarron, principal analyst with Mercury Research. "I would attribute price cuts to two things, mostly higher speed grades coming and also competition from AMD."
Intel is expected to launch new 900MHz and 950MHz Celeron chips in the second half of the year.
Intel also reduced prices for mobile Pentium IIIs, including its 900MHz and 1GHz mobile chips. The 900MHz mobile Pentium III was reduced by 17 percent from $508 to $423, while the 1GHz was lowered by 12 percent from $722 to $637. The largest mobile price cut made by Intel was on the 700MHz "low-voltage" Pentium III. The chip was reduced by 24 percent from $316 to $241.
Several new mobile chips, including faster 1.06GHz and 1.13GHz mobile Pentium III processors, will be announced by Intel in July.
Intel also sliced the price of its 1GHz desktop Pentium III chip by 14 percent, from $225 to $193. The chipmaker recently cut prices on its Pentium 4 chip by as much as 50 percent.
Advanced Micro Devices, which cut prices earlier this month, held the line on its processor prices. The company is expected to release faster desktop chips, including a 1.4GHz Athlon, in June.