SIGPC V2N2

SIGPC

Celebrate Celeron

Vol. 2, No. 2

06 Mar 1998

Intel finally enters the booming sub-$1000 PC market with its new "Celeron" brand processor. Celeron and Pentium II now form a P6-based product line that crosses multiple market segments. Where will future Merced-powered workstations and StrongARM-powered information appliances fit in?

References:

Chip giant Intel has finally entered the ultra-competitive sub-$1000 PC market. And in a big way. Intel is using the marketing knowledge it gained from the original "Intel Inside" campaign of a few years ago, and the more recent "Pentium", "MMX", and "Pentium II" branding efforts. The latest chip off the old silicon block is called "Celeron".

Celeron is targeted at a distinct market segment: the booming entry-level PCs that retail for $1000 or less. Intel has chosen to explicitly segment the entire desktop PC market into Celeron-based PCs for the "Basic PC" market at the low end, the "Enthusiast PC" and the "Professional PC" at the high end, and the "Performance PC" in middle. The middle and high-end of the desktop market will continue to be served by Intel's "Pentium II" brand. It is likely that higher-end servers will be a new market for Intel's upcoming "Merced" (IA-64) processor starting in 1999.

With the arrival of Celeron, Intel now has a product line spanning most of the desktop PC market. The product line is served by two distinct brands, Celeron and Pentium II. The entire product line is based on the same P6 core microarchitecture.

It is unclear how Celeron will play in the low-end PC market. It certainly has a lot of competition. Both AMD and Cyrix have been very successful in the sub-$1000 PC market with their system-on-a-chip designs that cost less than the Pentium or Pentium II while offering comparable performance. There is also the wild card "StrongARM" RISC processor that Intel gained access to through its litigation settlement with Digital last year (SIGPC V1N21, Digital to License Alpha to Intel).

The increase popularity of low-cost PCs seems to have caught Intel off guard. Until recently, they have focused on the high-end of the market. In fact, Intel is a master of making its own products obsolete through various pricing structures and by controlling chip availability. They have been able to keep their competitors at bay by continually releasing more powerful processors, forcing AMD and Cyrix to continually play catch-up. But now it seems the capabilities found in even the entry-level PCs is sufficient for many consumers. Perhaps this is the beginning of the mainstreaming of the "information appliance". Will we soon see new Intel chips running Windows CE 3.0?

Related information:

Announcement of Celeron

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