Server Farming

Jan 27 2009   4:48PM GMT

Intel lowers Xeon prices on declining CPU sales

Bridget Botelho Profile: Bridget Botelho

Intel Corp. dropped prices up to 40% on some of their Xeon processors this week following the release of some ugly financials for the fourth quarter of 2008 – so if you are in the market for an upgrade (and have any money in your IT budget) now’s the time.

The new prices on server CPUs include a drop on Intel’s quad-core Xeon X3370 from $530 to $316 (40% drop) and the 45nm quad-core X3360 from $316 to $266 (16% price cut).

According to Intel spokesperson Nick Knupffer, the company regularly makes price cuts throughout the year and that is what the recent price change reflects.

But, one would presume that these cuts aren’t just a routine act; Intel’s Q408 profit plummeted 90% and the company predicts even weaker conditions ahead. Intel, which twice lowered its fourth-quarter sales forecast, reported quarterly sales fell 23% from a year earlier to $8.23 billion, the Wall Street Journal reported.

Of course, Intel isn’t alone in the gutter; AMD’s CPU sales also slummped in 2008 and it expects sales to decline further through the first quarter of this year due to poor economic conditions.

Despite AMD’s reported a $1.42 billion fourth-quarter loss, a spokesperson claims there aren’t any price cuts on the docket for its server CPUs. “AMD moves prices on their products, and in this case speaking for Opteron, as required by the market. There is no regular price move schedule in place.”


2  Comments on this Post

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  • Nsimpson
    I think you maybe reading to much into this, or at least missing one important piece of informaiton. The processors listed are the 3xxx series which are used in 2-way configurations, and these will be superseded by Nehalem-based parts in 1H09, so these price cuts may be partly motivated by a desire to clear inventory before announcing the Nehalem-based parts.
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  • Bridget Botelho
    Yes, you could be right. That makes sense as well. My problem is, if Intel has lowered prices as a way to reduce inventory and make way for Nehalem, why not just say so? Instead, they gave me a smoke and mirrors response to a question about their price reductions, so who knows.
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