September 12, 1996 7:30 PM PDT

Alpha eyes lower-end PC market

Digital Equipment (DEC) is planning a less expensive version of its Alpha microprocessor to be developed with Mitsubishi for release next year, a move that could put the company in more direct competition with market leader Intel (INTC), according to Bloomberg news service.

The new version of the chip, called the Alpha 21164-PC, will cost about $400 and be more powerful than the $695 chip that is the least expensive in the line now, Digital representatives reported. The chip is being designed for PCs in the $2,500-to-$3,000 price range, company spokeswoman Linda Sanders told Bloomberg.

This market direction highlights a new strategy for Digital, which traditionally has targeted higher-end corporate systems with its microprocessors. Although the new Alpha still won't work with PCs that use Windows 95, it is the first step the company has made toward a lower-end market.

Digital and Mitsubishi plan to roll out the chip in the first half of next year.


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