Intel to Push Chip Migration in Turnaround Bid

It could soon be dual-cores in every PC. Intel is redrawing the lines that separate its PC processors in an effort to architect a second-half turnaround.

The chip maker, which suffered processor inventory and pricing woes that reduced its revenue and profit in the second quarter, will tout three processor brands.

Following the July 27 arrival of its Core 2 or “Conroe” processor line, the chip maker will tout a good, better, best approach to PC buyers using its Celeron, Pentium and Core 2 chips.

The move, it believes, will make dual-core processors more widely available, offering PC buyers greater performance even at lower price points and perhaps stimulate the PC market.

Greater uptake of dual-core chips would also help also help Intel to richen the mix of processors it sells, upping its revenue and profit figures.

Lower-than-expected selling prices—not unit shipments, which were basically on the money—were the cause of Intel’s lower second quarter financials.

The company on July 19 reported revenue of $8 billion in revenue and 15 cents a share, a figure that topped analysts’ estimates.

However, the two figures were 13 percent and 60 percent lower, respectively, than Intel’s revenue and earnings per share in the second quarter of 2005.

“The introduction of Intro of Core 2 Duo allowed us to reset our entire processor lineup,” in terms of price and positioning, said Paul Otellini, Intel’s CEO, in a conference call with analysts.

Click here to read about arrival of “Montecito,” Intel’s first dual-core Itanium 2 chip.

Intel will offer its entire Core 2 Duo desktop lineup for under $600, prices that are considered to be relatively low, at the outset.

It has also said it would cut dual-core Pentium D prices, allowing the Pentium D and other Pentiums to be offered in much lower-priced machines than they are today.

Intel’s Celeron line will continue to address the least-expensive PCs. But it believes that the combination of Core 2 and Pentium will be the one-two punch it needs.

“Technology and good products tend to be the overarching drivers of success in our industry,” Otellini said.

“At the end of the day, our job is to build the very best products. Great new products often ignite markets. You saw that with Centrino [in notebook PCs] With this new class of [Core 2] products, we can perhaps lift the whole market.”

Intel will concentrate the bulk of its marketing and channel sales efforts on Core 2. Otellini said it had shifted its advertising and marketing toward the chip line. Core 2 desktop chips will be widely available on its July 27 launch date in both systems and in the reseller channel, Otellini said.

“We believe we can satisfy demand for both of those products,” Otellini said, referring to Core 2 for desktops and notebooks.

“At launch you’ll see Conroe stocked in the channel. This one is being done as broadly as we know how to do it.”

Intel will also offer a Core 2 Duo notebook processor, dubbed “Merom.” That chip, which it says shipping to PC makers at the moment, will presumably be announced on July 27 as well. Intel has not yet offered the exact dates on which it will appear in PCs.

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