Intel Announces Surprise Processor Price Drop, Piles Pressure On AMD

Intel has announced some late but very nice post-Christmas price cuts for some of its most popular Pentium, Celeron, Xeon and Core 2 processors, all in a bid to revive slowing computer sales.

A mobile Celeron 570 saw its price fall by 48 percent while some Xeon processors, aimed at servers and workstations, have had their prices trimmed by as much as 40 percent.

But it is the fall in the price of the more popular Pentium E and Core 2 processors that will worry both retailers - because prices will need to be adjusted - and Intel's only competitor, AMD.

Intel has essentially EOLed the E2200 by bringing the price of the E5200 part - a 2.5GHz, dual core CPU with 2MB cache - to $64 while the price of cheapest Core 2 Quad - the Q8200 - falls by $30 to $163.

The semiconductor company has also introduced a number of Core 2 Quad processors with a lower power dissipation compared to their predecessors.

At 65w, the Q8200s, the Q9400s and the Q9550s will be more expensive than their 95w cousins but will almost certainly find their way in premium/highly overclockable computers and workstations.

Prices are per 1000 parts.

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Our Comments

Intel's price cuts announce four things. Firstly, AMD will have no choice but to respond with further price cuts in its own Phenom II line to compete or else be outclassed. Secondly, it could also mean that Intel may be launching faster and more expensive Core 2 Quad processors. Thirdly, it means that the economy - not competitors - is forcing Intel to cut its prices. Fourthly, e-tailers are also going to feel the pinch.

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