Intel slashes prices for Pentium III

In what could mark a new phase in its ongoing price war with rival chipmaker AMD, Intel has cut prices on its Pentium III line by 10 to 15 percent.

Wholesale cost of the 550MHz Pentium III dropped from $723 to $646, while the 500MHz version of the chip was lowered from $473 to $415. The 450MHz Pentium III fell from $263 to $226. Retail prices will vary depending on supply.

While Intel's Celeron chip competes with AMD's K6-2 and K6-III lines in the lower-end PC market, AMD - with the recent release of the Athlon - now has a chip that will compete in the performance PC segment. Analysts say the Athlon offers more performance than a Pentium III running at the same clock speed.

Intel is expected to cut prices on the Xeon, Pentium II and III on August 1, when the company releases a 600MHz Pentium III. Price reductions on its Celeron chip are due August 22, with AMD expected to follow suit.

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