The aggressively priced 1.7GHz Pentium 4, and the additional cuts on older chips to follow shortly, have led many analysts to predict a price war between the number one chipmaker and rival Advanced Micro Devices. While consumers will welcome lower prices, investors face the prospect of lower profit margins in an industry already hit by a slowdown in the PC market as well as a general economic malaise. Intel executives say lower prices will spark increased demand for computers that will result in increased revenues even at lower per unit profits, but analysts are not convinced.

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