Intel Introduces ‘Celeron’ Chip New Microprocessor Intended For Pcs Costing Under $1,000

First there was Intel’s Pentium. Now the world’s largest chip-making company wants computer users to remember a similarly cryptic name for its first new brand of PC microprocessors in five years.

Say hello to Celeron.

Intel Corp. on Wednesday christened a much-awaited line of low-cost microprocessors with the made-up word, Celeron, with plans to start selling the chips as the brains in low-cost personal computers this summer.

While Celeron may not immediately roll off the tongues of computer users, the circuitry is key to the giant chip maker’s hopes to regain the edge in the burgeoning class of PCs costing under $1,000. It also represents a rare strategic shift for Intel, which was forced to acknowledge last year that it missed the boat on one of the hottest trends in computing.

The Santa Clara, Calif., company became the No. 1 chip maker by developing increasingly powerful microprocessors, enabling more and more computer users to operate advanced applications for 3-D graphics, video and other features. Intel has spent hundreds of millions of dollars to promote its Pentium chip since introducing it in 1993.

But today, nearly one out of every two PCs sold cost less than $1,000 - just a year after major PC makers began rolling out the cheap machines - according to Mercury Research, based in Scottsdale, Ariz.

That has benefited Intel rivals AMD and Cyrix, which have focused on making inexpensive chips. Intel’s microprocessors are the brains in more than 85 percent of the world’s personal computers, but today are used in only three-quarters of sub-$1,000 machines, according to Mercury.

Indeed, Intel late Wednesday warned that its quarterly revenue and profit would be less than expected because of surprisingly weak demand for its microprocessors. The financial results are due out later this month.

Recognizing the threat, Intel last year departed from its drive toward ever-more powerful computers and formed a new 650-person division to develop the new chip, code-named Covington, that is based on the P6, or Pentium II design.

“Clearly we want to compete in that space,” Intel chief executive and chairman Andrew Grove said in an interview. “It is part of us recognizing that the PC market is no longer a homogeneous market.”