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Pentium III prices to fall Sunday

PC chip maker Intel Corp. will drop prices by as much as 35 percent on Sunday, including deep cuts on the company's two-month old Pentium III, said a source familiar with the cuts.

In addition, Intel will announce new speeds for its mobile and desktop processors. Intel's aggressive price cutting is becoming standard practice as it attempts to outpace Advanced Micro Devices Inc. and other rival chip makers. The latest price slashes seem planned to quickly shift customers to its Pentium III line, rolled out in March. "Many of the price changes are driven by Intel's desire to phase out the Pentium II products," said Mike Feibus, industry analyst with chip watcher Mercury Research Inc. It's no surprise then that the biggest cuts will be on the prices of Intel's Pentium III processors. The price tag of the 450MHz chip will drop 35 percent to $268 (£163), while the price of the 500MHz chip will fall 24 percent to $482, according to the source. Typically, PC makers cut the prices of their products following a reduction in Intel's price list. This latest round could mean quickly declining price tags on Pentium III systems. Prices on the Pentium II are falling as well, with the 450MHz Pentium II dropping 32 percent to $268 and the 400MHz version dropping 21 percent to $193. An oddity of Intel's phase-out strategy is that both the 450MHz Pentium II and the 450MHz Pentium III are priced identically. Intel would neither confirm nor comment on the cuts. The chip giant also plans to introduce a 550MHz Pentium III processor for its desktop lineup as well as a 366MHz mobile Celeron processor, said the source. Both processors increase the top speeds of their respective processor family by 10 percent. That's par for the course this year, said Feibus. "For the next year, we are looking at bump ups in performance with no change in architecture," he said. The latest Pentium III will sell in lots of 1,000 units for $744, while the new mobile processor will cost $170. Take me to the Pentium III Special.

Take me to the Merced Special.