Intel, Dell Cut Chip, Computer Prices

Intel Corp. on Wednesday announced hefty cuts in prices for its Pentium computer chips, and Dell Computer Corp. lowered some computer prices, citing cheaper parts such as microprocessors.

Santa Clara, Calif.-based Intel reduced prices of its Pentium and Pentium Pro microprocessors by 10% to 30%, effective immediately.

The cuts are aimed at maintaining Intel’s 80% hold on the personal computer microprocessor market and moving the Pentium Pro into the mainstream business market.

A spokesman for Intel said the company normally reduces prices once a quarter as it becomes more efficient at manufacturing the microprocessors.

The cuts bring the price for the 200-megahertz Pentium Pro to $707 from $857 and the 150-MHz Pentium to $364 from $428.

Austin, Texas-based Dell cut prices on its OptiPlex computer line for corporate users by as much as 21% and discounted some of its Latitude portables by 8%.

Dell said it was passing on the reduced cost of certain computer parts such as Pentium chips to its customers because of its very low inventories.

On Monday, Dell cut prices as much as 34% in its network server product line, the Dell PowerEdge network server family. Servers are computers that link other computers into a network.

“When the cost of components such as memory chips or processors drops rapidly, a company that maintains about 30 days of inventory is able to quickly pass along those savings in the form of lower prices by the end of the month,” Chairman Michael Dell said.

For example, the OptiPlex G 5133 model now costs $2,414, down from $3,021, for a PC running a 133-MHz Pentium processor.

Prices were reduced on two Latitude models running Pentium processors. The XPi P90D now costs $2,399, down from $2,599. The XPi P120D was discounted to $2,599 from $2,799.