Intel will release its "Conroe" desktop chip later today, prompting the usual drop in older chip prices and a new series of PCs with the chip in.
Dell will launch a series of desktops and workstations powered by the Conroe Core 2 Duo chip, and Gateway will use the chip in its high-end FX510 desktop PC, designed for gamers. Anticipating a marketplace battle, rival AMD slashed its prices on Monday on some Athlon 64 X2 desktop processors by as much as 57 percent.
AMD also cut prices for its Turion 64 notebook chips to make them more competitive with Intel's "Merom" Core 2 Duo chip, which is also due this week.
As it struggles with layoffs and slumping profits, Intel has been promising investors that it had a silver-bullet solution - its new family of dual-core chips. They will replace Intel's former flagship Pentium line, trading lower clock speed for better power draw and faster productivity.
The first member of that family, the Woodcrest Xeon 5100 chip for servers, launched in June. Now come the desktop and laptop versions.
The launch of Conroe will also make waves in other corners of the PC marketplace. Intel is expected to cut prices on Pentium chips, selling them cheaply enough to win share in cost-sensitive emerging markets.
One challenge faced by Intel however is ramping up production fast enough to meet demand. If the company doesn't reach peak production until the fourth quarter, it would miss the back-to-school season, said Nathan Brookwood, an analyst with Insight64. "For the last few months, they've been dissing their Pentium 4 architecture chips, saying 'Just wait until you see the new one.' But are they in a position to open the floodgates and ship enough Conroes so people don't need to buy that chip?"
When it does arrive, Conroe will make Intel much more competitive on desktops than it has been for the last few years.