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Intel’s savior has arrived.

The Santa Clara, Calif., chip maker officially introduced on July 27 its Core 2 Duo processor for desktops and notebooks. Speaking at an event at its Silicon Valley headquarters later the same day, Intel executives will proclaim the company as the new king of the PC processor hill on the strength of the new chips.

The Core 2 Duo chips, which will come out first in consumer desktops, continue a broad effort under which Intel has been working to increase its efficiency and to win back market share recently taken by rival Advanced Micro Devices. To that end, Intel has been conducting an extensive business review while also working feverishly to deliver Core 2 Duo chips—which it says offer as much as 40 percent higher performance and consume 40 percent lower power than the company’s Pentium D—to market as quickly as possible.

Click here to read how Intel plans to market Core 2 Duo and Pentium chips side by side.

“This is the chip that’s the key to Intel’s recovery,” said Dean McCarron, principal analyst at Mercury Research, in Cave Creek, Ariz. The chip maker “needs this product. The product and its derivatives are pretty critical for Intel to maintain a competitive position.”

Even so, statements by Intel executives may seem at least slightly overblown.

But “I wouldn’t underestimate the value and impact of this chip for Intel,” McCarron said. “Intel has been running on the same microarchitecture [circuitry that underpins its processor] for six years.”

That architecture, known as NetBurst, is the basis for Intel’s Pentium 4, Pentium D and most of its Xeon server chips. But it’s no longer considered competitive from a performance or power-consumption perspective, he said.

The Core 2, however, uses a new circuitry, dubbed Core Microarchitecture, enabling it to add performance and cut power. This has allowed Intel to become more competitive with AMD, following a period of market share loss and lackluster quarterly financials.

“It’s pretty much a wake-up call. [Intel] hasn’t been as competitive as it needs to be either from a performance or a pricing standpoint. They know it,” said Richard Shim, analyst at IDC in San Mateo, Calif. “From the desktop side, it’s kind of catch-up for the company. But it’s something they have to do. It’s something that they have to be aggressive with.”

PC manufacturers including Dell, Hewlett-Packard and Gateway are expected to start offering the Core 2 Duo in desktops, many of which will start at under $1,000, on July 27. Notebooks with the chip, however, aren’t expected to hit the market until August.

Corporate desktops and notebooks using the Core 2 Duo are expected to arrive in August and September.

HP, for one, began advertising a Pavilion d4600y desktop on its Web site on the morning of July 27. The desktop can be fitted with Core 2 Duos up to the E6600 processor., HP’s direct-to-consumer online sales arm, did not offer pricing. But its Pavilion 4000 series generally starts at the $899 mark.

Dell, meanwhile, began advertising its XPS 700 gaming desktop on the Web. Dell’s site said the XPS 700 will be available with Core 2 Duo chips up to the Model E6800. The site did not offer additional details.

Next Page: Other effects on the market.

The Core 2 Duo will have other effects on the market. Its arrival will help proliferate dual-core processors, which package two processors into a single chip and thus offer greater performance.

With the launch of the chip, Intel lowered prices of its Pentium D chips by up to 40 percent. Its family of Pentium Ds now list for between $93 and $316. AMD, in response, lowered Athlon 64 X2 prices significantly. Its Athlon 64 X2 chips now range from $152 for a Model 3800+ to $301 for its top-end 5000+.

Thanks to the price drops, dual-core desktops now cost less, making them available to a wider range of customers.

“What we’ll likely see in the short term is a tremendous amount of activity on the Pentium D,” McCarron said. “The Core 2 Duo will occupy the top bins of the market for dual-core, and the mainstream or even the upper end of the value PC market is going to migrate to dual-core probably this quarter,” McCarron said.

Buyers can already find dual-core desktops in the $500 range, which is considered a sweet spot for consumer PCs. HP’s Pavilion a1520y desktop, in just one example, can be fitted with a Pentium D 805—Intel’s entry-level dual-core desktop chip—for as little as $539 after rebates via The site also offers Pavilion a1550 desktops starting at $629, after rebates, with Pentium D or Athlon 64 X2 chips.

Many of the Core 2 Duo notebooks, upgraded versions of existing machines, are expected to be aimed at consumers, and getting them to retailers by the end of August will ensure that they’ll be in place for the holiday season.

The Core 2 Duo will appear in business desktops and notebooks in the next month as well.

Core 2 Duo desktops are expected to be available in greater numbers before notebooks, as notebook makers will likely wait to deliver all-new business machines until the first half of 2007, during which time Intel will add a new chip platform for notebooks.

The chip maker’s Santa Rosa notebook platform will offer Core 2 Duo notebooks a new enabling chip set—a group of chips that handles input/output and that, in this case, will include an option for a built-in graphics processor—and a new wireless module.

Click here to read about Intel’s plans to deliver chips with tens of cores in the future.

For its part, Intel has put a great deal of emphasis on its ability to ship its Core Microarchitecture processors—which provides the circuitry that underlies chips like Core 2 Duo—ahead of schedule.

Intel aims to continue the trend during the fourth quarter, during which it plans to deliver its first quad-core chips for desktops and servers.

The chip maker’s CEO, Paul Otellini, told analysts on July 19 that Intel will ship the two quad-core chips—Kentsfield for desktops and Clovertown for servers—in the fourth quarter, well ahead of its original shipment target of the first half of 2007.

Intel, however, has not yet clarified whether or not the quads will be available for purchase in PCs and servers before the end of the quarter.

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