Intel's Celeron Challenges AMD Pricing Strategy

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April 17, 1998 (12:00 AM EDT)

Intel's Celeron Challenges AMD Pricing Strategy

By Kelly Spang,

Intel's new Celeron processor is challenging Advanced Micro Devices' long-standing policy of providing comparable performance at a 25 percent price advantage.

Both Intel (company profile), Santa Clara, Calif., and Advanced Micro Devices (AMD)(company profile), Sunnyvale,Calif., cut processor prices this week.

Introduced earlier this week, Celeron is a 266-MHz Pentium II without Level 2 cache, targeted at the low-cost PC market. Debut pricing of Celeron is $155 in 1,000-unit quantities.

Meanwhile, AMD's K6 266 MHz is now priced at $156 in volume, lower than the Intel Pentium II 266 MHz at $246, but $1 higher than Celeron.

AMD officials said comparable performance against Celeron is not the K6 266 MHz. Instead, AMD officials claim their K6 performance equivalent to Celeron is the K6 200 MHz, which is priced at $80, 48 percent below Intel's Celeron.

The K6 233MHz is now priced at $101, 48 percent below the Intel Pentium II 233 MHz, which is priced at $198, and 25 percent below the Pentium with MMX 233 MHz, which is priced at $134. The Pentium with MMX 200 MHz dropped to $95, down from $123.

AMD also added to its lineup last week with a K6 300 MHz, which is priced at $246, while the Pentium II 300MHz is priced at $375.

Other Pentium II prices are: $824 for the 400 MHz, $621 for the 350 MHz, and $492 for the 333 MHz.

In its conversion to Pentium II, Intel executives said earlier this week that production of desktop Pentium with MMX wafers has stopped, but supplies should be available for the next couple of quarters. Intel will continue to produce Pentium with MMX processors for mobile and embedded applications.