January 13, 2003 2:41 PM PST

Intel shaves mobile chip prices

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Intel cut prices on its notebook chips by up to 38 percent Sunday, the first discount in what looks to be an eventful year for notebooks.

The Santa Clara, Calif.-based chipmaker slashed the price of its 2.2GHz Pentium 4-M by 38 percent, from $562 to $348, and decreased the cost of the 2GHz version of the processor by 31 percent, from $348 to $241. Price tags on Celeron notebook chips, designed for inexpensive laptop models, and on low-voltage Pentium III chips, for ultralight notebooks, fell between 24 percent and 14 percent.

Sales of notebooks have grown faster than sales of desktops for the past few years. Demand propelled by the growing popularity of Wi-Fi wireless networking is expected to keep that momentum going in 2003. That's good news for hardware makers, as notebooks generally carry higher profit margins.

Notebook announcements look likely to occur throughout the year. Last week, Apple Computer launched two new notebooks: a Power Mac with a 17-inch screen--an industry first--and a mininotebook with a 12-inch screen.

In March, Intel plans to unfurl Centrino, an energy-efficient package of chips that will let notebooks run for six hours on a single battery charge, according to Intel. The Centrino bundle includes a brand-new chip, code-named Banias, built especially for notebooks. A few months after that release, Intel intends to add a delayed wireless 802.11 a/b chip of its own making into the Centrino package.

Not to be outdone, Advanced Micro Devices will come out with a mobile chip based around its upcoming Hammer architecture in the first half. In addition, Transmeta plans to release Astro, a chip based around a completely new architecture, in the middle of 2003.

Intel's price cuts will temporarily reduce the price discrepancy between its notebook line and its desktop line of chips. The notebook chips contain features that reduce how much energy a processor consumes while idling in order to extend battery life and to reduce bulk and weight by obviating the need for extra cooling fans or insulating equipment.

Intel's desktop chips don't have these features, but they cost hundreds of dollars less. The 2.2GHz Pentium 4 for desktops, for example, costs $193.

As a result of the discrepancy, many manufacturers have been selling notebooks containing desktop chips, to great success. During the 2002 holiday season, these desknotes outsold traditional notebooks at U.S. retail, according to research firm NPD Techworld.

 

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