When it's easy to find a great holiday deal on a PC with a high-end processor, why would anybody settle for one with an entry-level chip?
That's the problem facing chip makers Intel and AMD, which have watched their carefully planned market segmentation blow up, thanks to a faltering economy and a massive downturn in technology spending. Just a few years ago, entry-level chips were aimed at sub-$1200 PCs; now you can find a system using Intel's premiere Pentium 4 chip at a lower price than some using its entry-level Celeron processor.
As Intel has rapidly dropped prices on the P4 to compete with AMD in a tough market, the company watched its less expensive Celeron lose market share. The Celeron dropped from 27.2 percent in the third quarter of last year to 20.9 percent of the market in the same quarter of this year, according to research firm Dataquest.
In that same period, Intel introduced the Pentium 4, and that chip went from a zero market share to 23.9 percent.
News source: PCWorld - Dropping P4 Prices Crush Celeron Demand
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