Intel has cut the prices for several of its microprocessors, including its high-end Core 2 Quad processors for desktops and its line of Xeon chips for single-socket servers, as the company looks to reduce its processor inventory and make room for a new line of chips based on the Nehalem microarchitecture.
The prices cuts, which were officially posted Jan. 18, followed the release of Intel's fourth-quarter 2008 financial results earlier this month. During the last quarter of 2008, Intel recorded revenue of $8.2 billion with a net income of $234 million, or 4 cents per share. By comparison, Intel reported a net income of $2.3 billion, or 38 cents per share, in the fourth quarter of 2007, with revenues of $10.71 billion.
The downbeat fourth-quarter numbers were a result of less demand for PCs, server systems and other hardware as the U.S. economy deals with a recession and growth in other parts of the world, such as Western Europe, has slowed down.
For Intel, this combination of different economic factors means that the company has more chips on hand that it can sell, and reducing prices is one way to cut the amount of inventory in both its own channel as well as the channels that supply PC vendors with processors. The price reductions also allow Intel to make room for new processors based on the Nehalem architecture.
The more significant change within Intel's pricing scheme is within its Core 2 Quad line for high-end desktops. Intel cut the prices on five processors within the Core 2 Quad family, and the company also added three new processors to the lineup.
Intel reduced the price of its Core 2 Quad Q9650 processors (3GHz) by 40 percent, which reduces the price from $530 to $316. In addition, the company cut the price of the Core 2 Quad Q9550 (2.83GHz) 16 percent from $316 to $266; the Q9440 (2.66GHz) 20 percent from $266 to $213; the Q8300 (2.24GHz) 18 percent from $224 to $183; and the Q8200 (2.33GHz) 16 percent from $193 to $163. Intel also added several processors to the lineup, including the Core 2 Quad Q9550s (2.83GHz) for $369, the Q9440s (2.66GHz) for $320 and the Q8200s (2.83GHz) for $245.
Other desktop price cuts included the Intel Core 2 Duo E7400 (2.8GHz), which Intel reduced 15 percent from $133 to $113. Intel also added a Core 2 Duo E7500 processor (2.93GHz) to the lineup for a price of $133.
In addition, Intel cut the prices on some of its older processors for desktops. Intel cut the prices on both its dual-core Pentium E5300 (2.6GHz) and E2200 (2.4GHz) by 14 percent. The E5300 now costs $74, and the E2200 costs $64. The company also cut the Pentium E5200 (2.5GHz) processor 24 percent from $84 to $64 and added a dual-core Pentium E5400 processor (2.8GHz) at a cost of $84.
The price of the dual-core Intel Celeron E1400 processor (2GHz) was slashed 19 percent from $53 to $43.
Intel also announced price reductions on some of its Xeon processors for single-socket server systems.
The Intel Xeon X3370 processor (3GHz) was reduced 40 percent from $530 to $316. Intel also reduced the prices of three other Xeon processors by 16 percent. The Xeon X3360 processor (2.83GHz) now costs $266, the Xeon X3350 (2.66GHz) now costs $266, and the X3330 (2.66GHz) now costs $224.
Finally, Intel reduced prices on several laptop processors.
Intel cut the price of the Core 2 Duo P8600 processor (2.4GHz) 13 percent from $241 to $209.
Intel also cut the prices of several of its older Celeron mobile processor from their original prices down to $70 per processor. Those $70 laptop processors include the Celeron 585 (2.66GHz), the 570 (2.26GHz), the 560 (2.13GHz), the 540 (1.86GHz) and the 530 (1.73GHz).
All the prices included in the Jan. 18 price cuts are based on shipments of 1,000 processor units.