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MMX, Celeron PCs turn wisdom on its head

May 29, 1998
Web posted at: 10:00 a.m. EDT

(IDG) -- IBM and Acer America this week released business PCs that dip well below the $1,000 price mark. But a $300 price gap between the offerings seems to contradict conventional wisdom -- that newer processors and more expensive PCs equal faster performance.

IBM's PC 300 GL is expected to retail at $969 and sports Intel's recently introduced 266-MHz Celeron processor. Acer's AcerEntra 3000 series starts at $699 and runs on the older, 233-MHz Pentium MMX processor.

Although Acer's Pentium MMX machine costs less, it will likely run business applications faster than IBM's Celeron-based PC, said Michael Slater, industry analyst and founder of Microprocessor Report, in Sebastopol, Calif.

That is because the Pentium MMX includes 512KB of Level 2 cache memory, allowing the processor to more quickly access information in the computer's main memory, Slater said.

Intel has yet to release a Celeron processor with Level 2 cache, an omission that has drawn fire from industry analysts since the chip was launched in April of this year. (See "Intel intros CPUs for business and home.")

PC performance varies with configuration, noted Slater, who said his remarks were based on his knowledge of Intel processors rather than any familiarity with the specific machines released this week from IBM and Acer.

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Intel has addressed the criticism of Celeron by stepping up the release schedule for future versions of the chip. (See "Intel revises Celeron plans after reports of poor performance.") The company now plans to release in the third quarter of this year a 300-MHz version that includes 128KB of Level 2 cache, with a similar 333-MHz Celeron chip to follow in the fourth quarter.

In the meantime, the smart money for machines used to run business applications is on those powered by Pentium MMX chips, according to Slater.

"That is where the best value is at this point," Slater said.

Acer chose the 233-MHz Pentium MMX chip over Celeron for performance reasons, according to a company spokesman.

"The Celeron hasn't faired that well against the 233-MHz MMX," said Robert Roggenbusch, product marketing manager for Acer's commercial desktops division. "The MMX performs better on certain applications."

IBM could not immediately be reached for comment.

By the end of the year, Intel is expected to phase out production of the Pentium MMX entirely as it transitions its processor line to the newer, P6 architecture on which Celeron is based.

Celeron was Intel's answer to critics who accused the chip giant of missing out on the booming market for sub-$1,000 PCs. To build a chip based on the P6 architecture that would also be priced low enough to address that sub-$1,000 market, Intel opted to do away with the Level 2 cache found on fully fledged Pentium II machines.

Intel says basing its product line around the P6 will eventually allow it to offer faster processors at lower prices.

Currently only available at 266 MHz, Celeron had a list price in April of $155 each in 1,000-unit quantities, and a 233-MHz Pentium MMX was priced at $134, Slater said.

The price of a PC is determined by other components besides the processor, observers noted, and IBM's machine also includes Intel's Accelerated Graphics Port (AGP) technology, 2MB of video RAM, and software that allows the PC to be managed remotely over a network.

In addition, Celeron's floating point performance should allow even a version without Level 2 cache to run 3-D graphics applications more efficiently than a Pentium MMX processor, Slater said.

But until Intel introduces Celeron processors that include on-board cache memory, the processor's performance will trail the Pentium MMX on everyday applications such as spreadsheets and word processing, Slater said.

"It's a budget chip that's moving forward gradually," Slater said of Celeron.

The AcerEntra 3000 series includes a 233-MHz Pentium MMX processor with 512KB of Level 2 cache, 32MB of RAM, and a 2.1GB hard drive. A version with a 4.3GB hard drive and a 56Kbps modem is priced at $799, Acer said.

IBM's PC 300 GL includes the 266-MHz Celeron processor, 16MB or 32MB of RAM, and a 2.1GB hard drive. The PC comes pre-loaded with Windows NT or Windows 95.

James Niccolai is a San Francisco correspondent for the IDG News Service.

Related CNN Interactive stories:

• Technology fuels small-business success - May 8, 1998
• Big Blues -- IBM cites weak demand, price wars in lower profits - April 21, 1998

Related stories at IDG.net

• Intel intros CPUs for business and home (Infoworld)
• Intel tells users they need more speed (Infoworld)
• Bargain-basement PCs: Under $1000 (PC World)
• Systems: $1000-$2249 (PC World)
• Desktops: $2250 and up (PC World)
• Latest and fastest processors (PC World)
• The right PC for the job (Chart) (PC World)
• Should you take the leap to 400-MHz? (PC World)
• High-performance systems come at a high price (Infoworld)
• Intel demonstrates future 500-MHz processors (PC World)

Related sites:

• IBM
• Acer America Corp.
• Intel Corp.