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Intel cuts prices: Price drops on processors create a great time

© Michael Christopher Brinton

On Monday, July 28th, Intel officially released their price cuts. What had been unofficially known since early June, is now known by all, computer literate or not. The cuts in prices on processors were up to as much as 50%. Largely motivated by stronger competition than normal (specifically AMD's K6 and the Cyrix M2), Intel's price cuts are in attempt to regain some of its market share lost to its competitors.

The price cuts makes previously mid-range processors very affordable, creating a good time to buy or upgrade. However, the price cuts have created a large demand for the cheaper processors which, will create a shortage and unfortunately shortages mean slightly higher prices. With a shortage of mid-range chips, Intel can push their more powerful (and expensive) chips. Price cuts were up to 50% on the lower end chips like the Pentium Classic, but the cuts on high-end processors weren't nearly as much. So behind all the marketing by Intel, their price cuts may not seem as great as they seemed.

All of this is just very good marketing strategy on Intel's part. It seems like a bad deal for the consumer in the long run but it has created good competition between Intel, AMD, and Cyrix. AMD stated when the K6 was originally released, that their prices would always be at least 25% less than Intel's for a comparable clock speed. The following is chart of Intel's price cuts(aproxamatley).

Chip	Old Prices	New Prices
Pentium 166	$250	$120-140
Pentium 200	$330	$190-220
Pentium 166 MMX	$300	$150-175
Pentium 200 MMX	$490	$250-290
Pentium 233 MMX	$650	$380-420
Pentium-II 233	$760	$600-650
Pentium-II 266	$920	$700-770
Pentium-II 300	$1,920	$950

Between Intel and AMD, August is shaping up as an excellent month to buy or upgrade. For people who are considering a purchase, it is important to know that price cuts usually take one to two weeks to filter down though all the retail outlets.

Some readers may be waiting to upgrade because they have heard about a new technology, Advanced Graphic Port, which Intel has been promising for a while. It will increase the data transfer rates for video cards, thus greatly improving current video cards. However, new video cards that support AGP will have to be released. People who like having the best and fastest equipment when it is released (set for mid-September) should wait for AGP technology to be released before they upgrade. However, since AGP will not be mainstream technology for a while, there will be a lack of choices for video cards that support AGP.

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