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Intel quietly cuts Celeron prices
December 29, 1998
The systems, many priced less than $1,000 and aimed at business customers, bring new speeds and capabilities to low-priced machines. But it's not clear yet whether businesses will warm to the new machines.
Compaq Computer, Dell Computer, Hewlett-Packard, Toshiba, IBM, and Gateway announced new machines that take advantage of the new 366-MHz and 400-MHz Celeron chips from Intel. NEC Computer Systems and IBM will sell machines with the new chip, but didn't announce specific products today.
The main hurdle for adoption of the Celeron in businesses is that computer makers must convince big businesses that it's worth the added complexity to introduce a new, third tier of computers, said Roger Kay, an analyst with International Data Corporation. Currently, big companies usually have two tiers of systems, mainstream and high-performance, he said.
Some companies--notably IBM and HP--have been "masking that complexity" by selling business PCs with features that make the computers easier for information services personnel to manage, Kay said.
Another difficulty Intel faces is simply that big businesses have a long qualification period to make sure that new machines are problem-free.
However, Kay said, smaller businesses and consumers are more likely to see the benefit of the Celeron machines--but in those areas, Intel faces stiffer competition from AMD and Cyrix, which sell low-cost chips that work the same or similar to Intel's.
| New faces in the Celeron lineup | ||
| Computer maker | Price | Features |
| HP | $1,139 | 400-MHz Celeron, 64MB memory, 8GB hard disk |
| Dell | $1,299 | 400-MHz Celeron, 32MB memory, 8.4GB hard drive, 15" monitor |
| Gateway | $999 | 366-MHz Celeron, 32MB memory, 4.2GB hard drive, 15" monitor |
| IBM | $859 | 366-MHz Celeron, 32MB memory, 4.2GB hard drive, 15" monitor |
| Compaq | $1,089 | 366-MHz Celeron, 32MB memory, 8.4GB hard drive, 17" monitor |
| Source: Various | ||
One reason Intel has faced an uphill battle with the Celerons is that the initial chips had poor performance because they lacked a cache, special high-speed memory that compensates for the fact that a computer's main processor runs much faster than its main memory.
Now, though, all the Celerons Intel sells come with 128KB of cache that runs as fast as the chip itself, which some tests have shown makes for a chip that's almost as speedy as the slower but larger 512KB cache that comes with Intel's Pentium II chips, Kay said. "That's a pretty compelling value proposition," Kay said.
Dell introduced Celeron models into its business-oriented OptiPlex line and home- or small business-oriented Dimension line. Machines with the 400-MHz Celeron are available now, starting at $1,248, including a monitor and network card.
IBM announced it would use the 366-MHz Celeron in business PCs costing as little as $859, not including a monitor, said IBM's Bill Hoke. Computers with the 400-MHz chip are expected later this quarter, he said. The system is good for people wanting lower-priced systems that still have the Intel brand name, and the new Celeron chips don't suffer the poor performance that kept commercial customers away from the earlier Celerons.
"Now that Intel is offering a Celeron with cache, it's become a viable offering for the business segment," Hoke said.
Compaq introduced new Celeron machines in both its retail Deskpro business computers, starting at $1,089, and its direct sales Prosignia line, with prices starting at $1,299, including a 17-inch monitor. The Compaq machines are available now.
NEC's machines, aimed at corporations and home offices, are slated to arrive in mid-February with prices starting at $900, not including a monitor.
Toshiba introduced 366-MHz Celeron machines into its Equium line for businesses, but 400-MHz machines will be available February 22. Prices begin at $999, not including a monitor.
Gateway's 366-MHz home machine, including a 15-inch monitor, costs $999. Its business model, which comes with a 15-inch monitor, Ethernet card, and Zip drive, begins at $1,299.
Hewlett-Packard has put the new Celeron chips into both its corporate Vectra line and its small business-oriented Brio line, and those machines will be available this week. The lowest-priced new Brio with a 366-MHz Celeron costs $842, not including a monitor.
Intel is an investor in CNET: The Computer Network, publisher of News.com.
