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May 26, 1999
Intel and Advanced Micro Devices, the chip giants, have begun a fresh bout of price war in India.
However, Intel sources claim the price cut is to phase out the Pentium II line in favour of Pentium III and not in response to competition.
Similarly, AMD has also cut K6-2 350 MHz and 400 MHz prices by nearly 20 per cent.
The K6-2 350 MHz, retailing at Rs 3,500, slipped to Rs 3,000 and the 400 MHz chip in the class fell from Rs 6,000 to Rs 5,000 in the open market.
The K6-IIIP, the equivalent of Pentium III, has been launched at a market price of $349 per unit in 1,000 units for 380 MHz processors and $316 for the 360 MHz.
Intel will now be forced to cut prices of both its Pentium III versions by another 15 to 20 per cent.
However, Intel sources rule out the possibility of any immediate reaction but agree that they are watching the market's response to AMD's processors and would take a decision after that.
Although Intel has been slashing prices of its Pentium line, it continues to maintain the cheaper, entry level Celeron line. The Celeron range of processors has not been affected in the latest cuts. Intel has almost abandoned the Pentium II range with the launch of its next generation PIII.
The latest cut in the prices of PIII has been well received and demand has picked up.
However, with the introduction of K6-III and the likelihood of K7 from AMD hitting the international market by next month, Pentium prices are bound to slide further.
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