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November 21, 1993

PENTIUM PRICES FALLING FAST

By CBR Staff Writer

Prices of Pentium-based machines are falling much faster than has hitherto been the case with a new generation of Intel Corp microprocessors, and a new all-out price war is expected next year, the Wall Street Journal reports, noting that some prices are now as much as 41% below initial list prices of about $5,000, with IBM Corp’s Ambra Computer Corp unit the US price leader with a low-end Pentium machine at $2,800 including monitor; at the present rate of decline, analysts believe Pentium machines will be as little as $2,000 next year, and despite the fact that the chips are relatively expensive to make, Intel is cheering because it hopes that the low, low prices will stop the rival PowerPC chip in its tracks; it shipped about 50,000 chips in the third quarter and is expected to ship as many as 175,000 in the current quarter, and some analysts reckon it could do 6m next year, although that compares with perhaps 40m 80486-compatible chips shipped during 1993; Intel has said that it would cut healthy profit margins rather than give up market share.

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