Intel slashes chip prices up to 31 per cent

Analyst: Chip maker looks to keep processors moving by cutting prices

Intel Sunday announced that it has dropped the price of seven processors by up to 31 per cent.

There were three price cuts in Intel's Core 2 Duo chip family. The 3.16 GHz Core 2 Duo E8500 was cut from US$266 to $183 as of July 20. That 31 per cent drop greatly outpaced all the other cuts, which ranged from 11 per cent to 15 per cent, according to an Intel price list.

The price of the Core 2 Duo 2.53 GHz E2700 chip was cut by 15 per cent cut to US$113, and the 3 GHz E8400 by 11 per cent to US$163. In addition the price tag for the company's Core 2 Q6600 2.4 GHz quad processor was reduced from US$224 to $1993, a 14 per cent drop.

Three cuts also came in the Xeon server processor family, with prices of both the X3220 and the X3210 reduced by 12 per cent. The price of the E3110 dropped by 11 per cent.

In April, Intel had slashed the prices on about a dozen of its processors up to 50 per cent.

Dan Olds, principal analyst with the Gabriel Consulting Group, said Intel is simply trying to keep its product moving out the door and that cutting prices periodically is a good way to do that.

"These chips will eventually go away in the next few quarters or even in a few years in some cases, but Intel wants to keep them moving out the door right up until they're discontinued," he added. "They're going to be bringing out new designs. Then they've got to look at their older stuff. The new stuff is faster and better, so you have to cut prices on the old stuff to keep it moving."

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