Notebook price wars to flare up in 2001

AMD went out of its way a couple of weeks ago to assure us that it would have a range of fast mobile processors to offer in Q1 next year but Intel appears to be several steps ahead of the game, at least during the first half of 2001.

Roadmaps we saw before Yule show Intel's plans are to gradually lower prices and introduce faster speeds of mobile chips -- including a 1GHz part in March -- and has segmented the market into a total of seven sectors.

These sectors are banded by price and performance, and it's worth going into this in more detail, particularly for corporate buyers who soak up the lion's share of products based on these processors.

The notebook sectors Intel favours are professional (notebooks costing over $3,000), mainstream performance 3 ($2,500 to $3,000), mainstream performance 2 ($2,000 to $2,500), mainstream performance 1 ($1,500 to $2,000), value 3 ($1,500 to $1,800), value 2 ($1,200 to $1,500) and value 1 ($1,000 to $1,200).

Intel further differentiates its notebooks by making chips some of which incorporate its battery-saving SpeedStep technology, and some which do not. All of the introductions in 2001 in the top four sectors by price will use this technology, while there is no sign whatever that Intel plans to migrate this to the three value sectors.

Nor, although Intel might be keeping this one very secret squirrel, does there yet appear to be a Pentium 4 notebook chip in the immediate offing, despite the fact that a senior executive told us at this year's IDF that the firm would definitely produce such creatures.

It is in these last three value sectors that AMD currently plays. Although the introduction of mobile Athlons and Durons will represent a challenge to other sectors during 2001, we anticipate that it will be quite some time before any challenge AMD makes will bite. Transmeta, too, still does not present any real challenge to Intel's current dominance of the very lucrative notebook sector. From the beginning of Q1, Intel will begin to introduce its 815EM chipset into all of its notebook processor line, and toward the end of the year the Almador-M chipset will begin to dominate the sector.

Here, briefly, is Intel's positioning of its notebook chips during the whole of next year.

Professional: Q1 850MHz, Q2 1GHz and 900MHz, Q3 Tualatin 1GHz/512K cache and 1GHz, Q4 Tualatin greater than 1.2GHz.

Performance 3: Q1 800MHz, Q2 900MHz and 850MHz, Q3 933MHz and 900MHz, Q4 greater than 1GHz and 1GHz.

Performance 2: Q1 800MHz and 750MHz, Q2 850MHz and 800MHz, Q3 900MHz and 866MHz, Q4 1GHz and 933MHz.

Performance 1: Q1 750MHz and 700MHz, Q2 750MHz, Q3 850MHz and 800MHz, Q4 900MHz and 866MHz.

Value 3: Q1 700MHz, Q2 750MHz, Q3 850MHz and 800MHz, Q4 900MHz and 866MHz.

Value 2: Q1 650MHz, Q2 700MHz, Q3 850MHz and 800MHz, Q4 900MHz and 866MHz.

Value 1: Q1 600MHz, Q2 650MHz, Q3 700MHz and Q4 800MHz.

If AMD makes its target on its mobile Athlons and Durons, it is likely to produce microprocessors targeting the lower three sectors which include its own battery saving technology, and, in our view, it will also attempt to introduce the same type of pattern in the notebook market as it did with the desktops last year, that is, produce fast 1GHz microprocessors which undercut Intel's pricing model.

If it succeeds in so doing, this is likely to upset the applecart and we expect that the incursion of AMD and to a lesser extent Transmeta into this marketplace will mean some blood-letting in the notebook market too.

AMD is keeping its cards very close to its chest in the notebook market, suggesting that it either has some big surprises for us all in the New Year, or, alternatively, that transferring the Athlon core technology to the notebook market is not as easy as it first thought. We're still itching to get our mitts on an MDR report on AMD notebook chips that we know is out there somewhere....

However, AMD has an even bigger challenge persuading the corporate market to move to its notebook processors than it has for its desktops, largely because of entrenched buying decisions and because of Intel's current stranglehold on this sector.

Lest we forget -- and we shouldn't -- Via also has mobile processors up its sleeves, and may well disturb the lower end of the notebook marketplace by continuing its policy of introducing cheap and cheerful x86 processors which will go into equally cheap and cheerful notebooks.

Via has one big advantage with notebook manufacturers and that is that many of these are produced by Taiwanese manufacturers either on the island itself or on the Chinese mainland. Via is, therefore, the devil (sorry Via) the Taiwanese manufacturers know.

For specific details of pricing on Intel processors, go to this page. ®