New Intel chipsets, Celerons cut PC prices

Zardon

Low-priced PCs using Intel's Celeron chip are about to go high-tech.
PC makers will launch a slew of new desktop PCs next week that will pair Intel's newest 1.7GHz Celeron chip, announced Wednesday, with two new versions of its 845 chipset, dubbed the 845G and the 845GL, that include built-in graphics and Universal Serial Bus 2.0, a high-speed connection for digital cameras and other devices.

The combination of the chip and chipset will allow manufacturers to deliver new, low-priced PCs that offer greater performance than current Celeron PCs, but will start at $650, about the same as current Celeron desktops or the cheapest Pentium 4s. They also offer greater functionality: USB 2.0 supports faster data transfer, speeding up file transfer for tasks such as downloading pictures from a digital camera.
Dell Computer, Gateway and many other PC makers are expected to use the chipset in new PCs for both consumer and corporate PC lines, to be announced next week. A chipset is the data coordinator inside a PC, handling tasks ranging from shuttling data between the processor and memory to sending data back and forth to disk drives.

The integration of the graphics chip, while it might sound like small potatoes, is a big event in the component world. Typically, a low-end graphics card costs between $25 and $30. By removing the chip, PC makers can eliminate about $50 from the end price of a PC. Manufacturers can use that savings to cut prices or to add more memory or better components while keeping prices the same.

While some of the new systems will cost $650, a well-configured PC with the new chip and chipset will sell for about $900 and will include 256MB of RAM, a 40GB hard drive, a CD-rewritable drive and a 17-inch monitor, sources say. Currently, $900 buys a PC with about the same configuration and a 1.3GHz Celeron chip.

The chipset, which can also be matched with Pentium 4 chips, will help increase the popularity of that chip because it will reduce costs. To date, no one has released an integrated chipset for Pentium 4s.

Initially, computers with integrated graphics chips were targeted at the budget end of the consumer market. While they sold in that area, corporations also rapidly adopted them. In one of the wrinkles of the chip business, Intel actually exited the market for standalone graphics chips because of anemic sales. Soon after, however, Intel became the No.1 graphics company in the world on the strength of its integrated chipset sales.

Chipsets may "not be very exciting to most PC buyers," said Dean McCarron, principal analyst at Mercury Research. "But the cost reduction that 845G enables is going to let the Pentium 4-class (components) get to lower price points that it simply isn't able to get to right now."

The two chipsets differ only slightly. An 845GL chipset will offer only a 400MHz bus and will emphasize lower cost. It will be used mainly in low-priced, Celeron-only PCs, sources indicate.

Meanwhile, the 845G version will support a wider range of PCs because it adds support for the Pentium 4's new 533MHz bus. Should they so choose, PC makers can use the 845G to consolidate development of their previous product lines, which used two different chipsets, by creating a single 845G platform that spans multiple configurations or possibly multiple model lines. Such a platform would be able to offer a low-priced 1.7GHz Celeron configuration and a higher-priced 2.4GHz Pentium 4, for example.

Because of this, and also because of its timing, the 845G could quickly become Intel's most popular chipset.

"It has a pretty good shot at it. All the evidence is that this may be the most aggressive ramp Intel has ever done on a chipset," McCarron said.

But at least one PC maker, Hewlett-Packard, has decided to hold off for now. It will not offer the new 1.7GHz Celeron chip, a representative said. It will stick with the newly announced 1.4GHz Celeron and evaluate higher-speed Celerons as they come to market.

As previously reported, the 1.4GHz Celeron is based on Intel's Pentium III processor technology, whereas the new 1.7GHz and faster Celerons are based on Netburst, the processor architecture behind the Pentium 4.

The faster 1.7GHz Celeron chip offers a performance advantage over the 1.4GHz chip--though the gap may not be as great initially, as the 300MHz clock-speed difference might intone.

"I'm estimating that they'll be pretty close in performance," McCarron said.

However, the new Celeron is expected to ramp up quickly in clock speed, with 1.8GHz and faster versions coming later in the year.

By John G. Spooner