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Intel price drops no trickle treat

Prices even rising because of shortages

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Evidence is emerging that the price cuts Intel has made on its microprocessors in the month of February are not percolating through to consumers as quickly as normal. Yesterday we reported that there is a big shortage of boxed Intel Coppermine units in the channel, and one dealer said that the price had actually risen over the last week. Even PC manufacturers, such as Dell Computers, are not making the immediate adjustments normally expected, suggesting that shortages of the top-end chips are helping to keep prices stable. A dealer who regularly buys boxed Intel chips through the distribution channel said: "I bought two Pentium III 550MHz 512K SECC2 processors from www.scan.co.uk last Tuesday for £189 + VAT each. One week later they are at £215 + VAT. This is odd, considering Intel had announced a 'price cut' on these pieces which has not fed through at all." System builders are reliant on the distribution channel to supply them with components. Intel has a Ship Direct scheme which applies to PC manufacturers, but this means you have to buy quantities of 1,000 -- a considerable risk for small companies, given that there is little price protection on this type of component. ®

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