Intel Cuts Chip Prices After Rough Fourth Quarter

Sometimes a recession has its benefits.

Some retailers have little choice but to drop their prices in a desperate attempt to win that hard-fought consumer dollar. Take the case of Intel, which recently revealed that it will be dropping the prices of several of its popular microprocessors.

On the chopping block is the popular high-end Core 2 Quad processors for desktop computers (roughly 4x the power of a single processor chip) and the company's Xeon line of chips, specifically engineered for single-socket servers. Officially, the cuts stem from a desire to clear out inventory space for a whole new line of processing chips based on 'Nehalem' Core i7 design.

However, the price cuts come hot on the heels of recent reports that Intel's fourth-quarter 2008 was down, way down, from its previous year. In the last quarter of 2007, the company posted an impressive net income of $2.3 billion with revenues of $10.71 billion, good for 38 cents a share.

This past quarter those results slipped significantly, with a net income of just $234 million at a paltry four cents a share. It seems Santa's sleigh just wasn't packing as many microprocessors this past year (he must have been handing out Nintendo Wiis instead).

Intel wasn't alone in its fourth-quarter misery. We recently reported that PC sales slumped over the same period, with desktop computers taking a 16 per cent hit over the previous year.

The cuts to the Core 2 Quad line, usually destined for premium desktops, reflect that. The Core 2 Quad Q9650 (3 GHz) has slipped 40 per cent, down from $530 to $316. Also slipping is the Core 2 Quad Q9550 (2.83 GHz), down 16 per cent to $266, the Q9440 (2.66 GHz) down 20 per cent to $213, the Q8300 (2.24 GHz), down 18 per cent to $183, and finally the Q8200 (2.33 GHz), down 16 per cent to just $163.

The desktop-based Core 2 Duo E7400 (2.8 GHz) has also slipped 15 per cent, from $133 to $113.

On the cheap end, the E5300 has been reduced to $74, the E2200 to $64, and the Celeron E1400 (2 GHz) has been cut all the way down to $43. It's certainly a good deal, considering the price.

Some laptop chips have also gone down, including the Core 2 Duo P8600 (2.4 GHz), reduced 13 per cent from $241 to $209.

Along with the cuts come introductions for several new, low-power microprocessors capable of running cooler and offering better performance. (Source: xbitlabs.com)

The price cuts have already been put into effect, dated January 18. It seems a lousy Christmas for Intel has made for a consumer's very Happy New Year.