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Pentium 4 arrives
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November 20, 2000: 9:08 a.m. ET
Intel rolls out latest PC processor; sees Pentium 3 phase out in early 2002
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - Intel Corp. on Monday introduced its latest personal computer microprocessor, called the Pentium 4.
A range of computer makers, including Compaq (CPQ: Research, Estimates), Dell (DELL: Research, Estimates), IBM (IBM: Research, Estimates) and Gateway (GTW: Research, Estimates), are expected to announce the immediate availability of systems featuring the Pentium 4.
 Initially available at clock speeds of 1.4 and 1.5 gigahertz, the introduction means the Santa Clara, Calif., company now has the fastest processors available, a distinction it lost to rival Advanced Micro Devices (AMD: Research, Estimates) after a technical glitch led Intel to recall its highest speed Pentium 3 processors in August.
Intel and AMD have been locked in a fierce battle for bragging rights as the company that offers the fastest chips. Some critics suggested that the rivalry between the two companies is what prompted Intel to drive up the clock speed of its Pentium 3 to a point where its architecture could not handle the load, leading to the recall.
But the Pentium 4 is built around a whole new architecture, called "Net Burst," which is designed to optimize multimedia applications and can handle much higher clock speeds. The company is aiming to release a Pentium 4 processor operating at 2 GHz by the third quarter of 2001, according to Paul Otellini, executive vice president and general manager of Intel's architecture group.
The last time that Intel made a significant change to the architecture of its microprocessors was when it introduced the Pentium Pro in 1995. The Pentium 4 has 144 new instructions built into it that are designed to better handle audio, video and 3D applications that are becoming more prevalent with the rising use of the Internet.
"We designed this product for where we believe the Internet is going," Otellini said. "We really have tried to anticipate the growing application base for Internet applications and usage."
 Dozens of software vendors rallied behind the Pentium 4 at the Comdex technology convention in Las Vegas last week, demonstrating more than 60 different applications that have been developed specifically to take advantage of the chip's new features.
At first, the Pentium 4 will be targeted at high-end desktop systems, mostly for consumer enthusiasts, according to Otellini. He said the company is aiming to have Pentium-4 based systems available in all the mainstream segments before the end of 2001.
Initially, the 1.5 GHz Pentium 4 will be available for $819, while the 1.4 GHz version will sell for $644. Both those prices are for unit volumes of 1,000 or more.
However, those prices are likely to come down relatively quickly. Intel executives have vowed to aggressively ramp production of the Pentium 4, sales of which they expect to overtake the Pentium 3 early in 2002.
"The crossover point will be very early in 2002, and our goal, of course, is to pull that in to 2001," Otellini said. In order to accomplish that goal, Intel will be very aggressive in pricing the chips, he said.
That could add pressure to what already is shaping up to be a harsh pricing environment in the PC processor market in 2001. Several analysts in recent weeks have voiced concerns that AMD's efforts to garner more market share combined with weaker-than-expected demand for PCs has laid the groundwork for a fierce pricing war in the coming year.
"I think you'll see very aggressively priced systems out there," Otellini said. 
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Pentium launch
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