New Chips Lead to Lower Computer Prices

Intel had its biggest product roll-out in six years Thursday with the introduction of the Core 2 Duo processor chip. Intel and rival Advanced Micro Devices used the product switch to drop prices on many chips. Computer buyers should see substantially lower costs for powerful desktop PCs in the coming months.

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RENEE MONTAGNE, host:

The price of some personal computers are likely to drop following drastic price cuts this week on some Intel and AMD microprocessors. At the same time, Intel unveiled a new line of processors that are much faster than its previous chips.

NPR's Wendy Kaufman reports.

WENDY KAUFMAN reporting:

The intense rivalry between Intel and Advanced Micro Devices heated up this week. Intel, which has the lion's share of the market, has been losing ground to AMD, because AMD had better technology.

But yesterday, Intel launched a new processor, which it calls the Core 2 Duo. Analysts, including Rob Enderly, say the new chip is a winner for Intel, and puts the company clearly ahead in technology.

Mr. ROB ENDERLY (Analyst): This is their biggest launch since their Pentium launch in the early '90s. This is showcasing a near 40 percent increase in performance from their previous generation, which is about 2x the most you typically get, chip to chip.

KAUFMAN: With a brand new chip on the market, Intel is cutting the price of older generation chips, in some cases by 50 percent or more. AMD has cut its prices too, to remain competitive.

Ms. ANUSH YEGYAZARIAN (Senior Editor, PC World): What that means, when you're going out to shop, basically, is you're going to see a lot of really great deals.

Anush Yegyazarian is a senior editor at PC World. She says if you don't want the top of the line, you'll soon be able to get a very good PC for a very good price.

Ms. YEGYAZARIAN: Obviously, the overall price is going to depend on more than the processor. But basically, you know, you're going to be able to get $500 to $800 computers that do a heck of a lot.

KAUFMAN: She says they'll do just about everything most of us do. But serious gamers, for instance, might opt for PCs with the new chip.

While Intel has moved ahead of AMD with its latest chip, AMD hopes to leapfrog over Intel later this year with something called a 4x4 platform. Intel will respond with yet another new chip. While today's best chips have essentially two brains, the new chips from both companies will have four.

Wendy Kaufman, NPR News.

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