P4 Pricing/Future

Now that you know more about the guts behind the 1.8GHz P4, it's about time we provided you with an update on what's happening in the P4 market. First lets go over the new processor pricing:

Pentium 4 Prices in 1,000 unit quantities
	5/27/01	7/1/01
Pentium 4 1.3GHz	$193	$193
Pentium 4 1.4GHz	$193	$193
Pentium 4 1.5GHz	$256	$256
Pentium 4 1.6GHz	N/A	$294
Pentium 4 1.7GHz	$352	$352
Pentium 4 1.8GHz	N/A	$562

As you can see, existing Pentium 4 prices remain unchanged. All Intel has done is slip the 1.6GHz and 1.8GHz processors neatly inside their existing Pentium 4 lineup. In fact, the introduction of the Pentium 4 1.8GHz at $562 partially allows Intel to return processor pricing to historical levels. We're still a long way from the days of $1,000 CPUs of merely a year ago, but it's a start. Since existing P4 prices remain the same Intel is also able to keep low-end P4s in the mainstream PC price range. This is all part of the company's goal of getting Pentium 4 production above Pentium III by the first quarter of next year. As a result of these changes, the average selling price of P4 line as a whole rises from $248.50 to $308.30, a 19% increase.

Intel introduced both processors to offer more flexible price and performance configurations to PC manufacturers. Intel feels that the arrival of both chips should fill in gaps that existed in the previous Pentium 4 lineup. This isn't the first time Intel has done this; earlier this year Intel introduced its Pentium 4 1.3GHz at $409 (in comparison, the Pentium 4 1.5GHz cost over $800 at the time) to appeal to the mainstream value segment. Gradually these slower chips will be retired as higher clock speeds are introduced. As AMD found out with K6, PC manufacturers prefer to move in small baby steps, 200MHz swings in clock speed are considered radical to an industry that's used to the 50MHz increases introduced with Pentium II.

Future plans

Intel's plans haven't changed much since our CPU Roadmap article in late April. While Intel hasn't officially introduced its SDRAM-based 845 chipset for Pentium 4, several motherboard manufacturers plan to have boards ready for launch. 845 will be officially be paired with DDR memory in 2002, although rumors persist that this date could be moved up to Q4 of this year. The introduction of lower cost 4-layer 850 motherboards as well as 845 should result in even lower priced P4 systems.

In terms of CPUs, Intel still plans on introducing its 2GHz Pentium 4 during this quarter. Then, in Q4 Intel will introduce its 0.13-micron version of Pentium 4, codenamed Northwood. This chip will also bring with it a new 478-pin interface; today's CPUs utilize a 423-pin socket.