Intel is likely to have to cut prices of its mobile microprocessors between now and the 2003 launch of its next-generation integrated "Banias" processor, an analyst said on Wednesday.
The result could be a pricing war, similar to what has happened in the desktop PC market.
According to Kevin Krewell, an analyst for Instat/MicroDesign Resources, Intel's product line will consist of the mobile Tualatin processor and the mobile Pentium 4 until the end of 2002. At that point, Intel will take another swing at an integrated processor, the Banias, Krewell said. "It's a highly-integrated Timna 2, in a sense -- without RDRAM, of course," he said.
To date, Intel has only confirmed that a completely redesigned processor will be introduced in the "2003 timeframe," according to a spokeswoman for Intel. She would not confirm the "Banias" code name. "It's completely different than what exists today -- that's all we've said publicly," she said.
The Banias should be based upon a modified Pentium III architecture, Krewell estimated, minus the hyper-pipelined architecture found within the Pentium 4. Krewell said he believed the Banias will probably begin life at about 1.4GHz, picking up where the Tualatin-M leaves off. Like the Pentium III, the Banias will probably be available in a range of voltages, creating the sort of "Pentium III/low-voltage Pentium III/ultra-low-voltage Pentium III" hierarchy that exists today.
The Tualatin-M will launch on July 30, the Intel spokeswoman confirmed Wednesday. Sources have said it will initially launch at no higher than 1.13GHz.
Until the Banias rolls out in late 2002 or early 2003, Intel will likely have to watch its pricing carefully, Krewell said. Historically, Intel has charged what the market will bear within the mobile space, Krewell said, charging $500 for a particular processor that might cost desktop buyers about $300. Historically, Intel executives have said the additional testing and qualification of the low-power parts justifies their cost.
"Until Banias ships in late 2002 or early 2003, however, Intel is just going to have Tualatin in the mainstream marketplace," Krewell said. "It's going to be a bit long in the tooth, and ASPs [average selling prices] are going to fall off."
Krewell called the recently launched Athlon 4 from Advanced Micro Devices Inc. "a very strong competitor," saying that the chip will have a definite advantage until the launch of the mobile Pentium 4, expected in the first quarter of 2002. Krewell said he predicts Intel's blended mobile processor ASPs will decline by 20 percent from the fourth quarter of 2001 until the fourth quarter of 2002 as a result of increased competition and continued reliance on the Pentium III's microarchitecture.
Perhaps in response, Intel on Sunday cut prices of most of its mobile Pentium III processors, with the discounts reaching as much as 37 percent.
Unit sales, however, should remain strong. Despite the present economic slowdown, Instat/MDR predicts that a cyclical recovery in the fourth quarter of 2001 will allow Intel's mobile unit volume to grow 5 percent for the entire 2001 calendar year, Krewell said. In 2002, unit sales should increase by 26 percent, due to pent-up demand and sales of the Windows XP operating system.
Banias is a town in Israel, containing a spring said to be the source of the river Jordan. Timna, another Israeli site, was reputed to have been the site of King David's copper mines, reminiscent of Intel's Coppermine architecture.
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