Intel Corp. said Tuesday it dropped the price on its least-expensive Pentium II microprocessor by 33 percent to allow computer manufacturers to begin turning out cheaper computers in the new year.
Intel said it reduced the price of its 233-megahertz Pentium II chips to $268, down from November’s $401.
The drop means that a computer with a Pentium II chip, Intel’s newest model, can sell for $1,500 to $2,000, a spokesman said.
The price drop was not unexpected, because Intel customarily cuts chip prices in the first quarter each year. But it did come sooner than some Wall Street experts anticipated.
Intel was expected to cut the price of the chip to $263 as of the end of January, said Michael Gumport, an analyst with Lehman Brothers Inc. But a more competitive pricing environment partly sparked the earlier cut, he said.
Cuts for all other Pentium chips, including older versions and other Pentium II models, are expected to come in February.
Pentium II prices are expected to fall far enough by the end of 1998 that computers costing under $1,000 can be equipped with the lowest-priced versions.
