1GHz PCs: fast, but certainly not cheap

While Intel and AMD are in a mad dash to the finish line with 1GHz processors, due later this month, consumers are asking, "Where can I get 'em... and for how much?" The answer: Bring some dosh
Written by John G.Spooner, Contributor

While Intel and Advanced Micro Devices (AMD) are sprinting toward the finish line in a mad race to see who can be the first to release a 1GHz -- or 1,000MHz -- processor for desktop PCs, consumers are thinking: What's in it for me? Or, in other words: Where can I buy a 1GB machine, and for how much?

Sources say the two companies will both ship their 1GHz chips by the end of this month. For the consumer, this will mean more powerful, lower priced chips for mid-range PCs. As higher clock speed processors are introduced, chip makers will need to reduce the price of the fastest chips they're currently manufacturing. This will allow consumers to purchase more megahertz for their money. Consumers seeking a faster machine will benefit from competition between Intel and AMD because they'll be able to purchase their 1GHz PCs much sooner than originally expected. Previously, 1GHz chips weren't expected until the second half of this year.

According to sources, major PC manufacturers Dell Computer and Hewlett-Packard will begin shipping 1GHz Pentium III-based PCs by the end of the month. AMD sources said the it will be shipping a 1GHz Athlon chip before the end of the month as well. Furthermore, 1GHz Athlon PCs from brand-name OEMs should be available at the same time, they said. That means AMD stalwarts Compaq Computer and Gateway should start shipping 1GHz Athlon-based PCs in the same time frame.

However, these new, faster PCs won't be cheap. Analysts predict the 1GHz chips will carry an initial premium over the current, most expensive processors. For example, AMD's top-rated 850MHz Athlon costs about $850 (£527) in 1,000-unit quantities, but both companies' new 1GHz chips will set you back about $1,000 (£620) at introduction, analysts say.

While those prices will come down as the chip becomes readily available, the initial high cost will translate into Pentium III-based PCs costing upward of $4,000 (£2,480) when including the price of a monitor.

A source close to Dell said that its GHz Dimension will cost up to $4,000, or possibly more. That PC will likely be fitted with Rambus memory (Rambus Dynamic RAM), which, at the moment, costs more than twice as much as the synchronous dynamic RAM (SDRAM) used by Athlon systems.

Despite their initial cost, analysts predict 1GHz PCs will sell well. "There's no denying that 1GHz will be a pretty compelling marketing button," said Mike Feibus, principal analyst at Mercury Research.

But that's only if people can get their hands on a system. Supplies of 1GHz Pentium III chips from Intel will, the company readily admits, be short at first. It says it will have "limited" supply of GHz Pentium IIIs out in the second quarter, with volume coming in the third quarter. "We will target 1GHz in the first half to people that can really appreciate it, such as PC enthusiasts and high-end gamers," said Intel spokesman George Alfs last week. "It really will be limited volume in Q2."

This means PC makers that cater to those market segments will likely see the GHz chip first. While 1GHz Pentium IIIs will be available in systems, they may not be in other ways, such as in the reseller channel as boxed processors, Alfs also said last week.

It's not clear how many processors AMD or Intel will need to satisfy demand for the faster PCs. Short supplies of the 1GHz Pentium III, in a case similar to the 800MHz Pentium III, will surely frustrate some consumers. AMD, sources said, intends to launch with enough capacity to satisfy the demands of its OEMs. However, analysts say the higher initial pricing on some 1GHz PCs may limit demand. "My guess is that pricing will take care of that until there is greater supply," Feibus said.

"We're supporting the 1GHz Pentium III," said a Hewlett-Packard spokeswoman on Thursday. "We will be shipping consumer models (in HP's Pavilion line of PCs) starting later this month... and most likely be shipping corporate (desktop PC) models in June."

"We are going to have a (Dimension) product," a Dell spokesman said. "However, we don't have a date yet." While dates are not final, it is likely that Dell will have its 1GHz Pentium III-based Dimension PC ready by the end of the month as well.

For AMD, the run to 1GHz will be instantaneous. Sources say AMD's 900MHz and 950MHz Athlon chips will be announced at the same time as the 1GHz Athlon.

Meanwhile, sources say Intel is planning to announce its 850MHz and 866MHz Pentium III chip in the latter half of this month. It's unclear exactly how the company will handle its announcements -- including its forthcoming 933MHz Pentium III introduction. However, sources say it's possible that the four chips will be announced on or about the same time. Intel officials, however, refused to comment on specific launch dates. When asked, they reiterated a commitment to launch the 1GHz Pentium III shortly.

For full coverage, see 1GHz: The whole story.

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