John G. Spooner
April 12, 2004, 6:32 PM PT
Dell has juggled the lineup of Pentium 4 processors offered in its consumer desktops twice in recent weeks, in order to compensate for what it says are tight supplies of newer versions of the Intel chip.
Last week, Dell stopped offering Intel's 3.4GHz Pentium 4 Extreme Edition processor in consumer desktops. The high-end chip, designed for tasks like gaming, was dropped as an option on Dell's Dimension XPS desktop after lead times for machines equipped with the chip eclipsed the six-week mark.
And in March, Dell switched from the latest version of Intel's Pentium 4, a chip dubbed Prescott, to Northwood, an older version of the Pentium 4 that comes in speeds similar to those of Prescott, as the main processor offering for Dell's Dimension XPS and Dimension 8300 desktops.
Supplies of the Prescott chips and also of the 3.4GHz Pentium 4 Extreme Edition chip have not been sufficient to meet Dell's needs, so the company has shifted away from them, rather than disappoint customers with lengthier delivery times for new desktops, a company representative confirmed.
"We want to be sure we're going to meet the volume requirements (for serving customers) on a sustained basis," said Lionel Menchaca, a Dell spokesman. "If we switch back to Prescott, we want to make sure we can sustain" volumes.
New processors are generally always in tight supply. Still, the fact that Dell and also Hewlett-Packard are having trouble getting an adequate number of the Prescott Pentium 4s more than two months after the chip's introduction suggests one of two things: Intel is either taking longer than expected to bump up production, or demand is too high to fill orders in a timely manner with the limited supply of chips available.
Intel has yet to make its 3.4GHz Prescott Pentium 4 processor available in large volumes, despite promising it for the end of the first quarter. That may indicate that the chipmaker is having some problems. Neither Dell nor HP is offering that chip, the companies report, forcing them to offer the 3.4GHz Northwood Pentium 4 instead.
But the current situation may eventually resolve itself, as Intel works to increase the number of Prescott chips it makes, Mercury Research analyst Dean McCarron said.
"When you're in the middle of a very aggressive product ramp, while (some) volume is available at the beginning, it's much smaller than it is three months later. It's natural that someone who's manufacturing a very high volume of systems would be cautious about deployment plans" for a new processor, he said.
A smooth transition
Meanwhile, Dell's shift back to Northwood chips was relatively easy, costing next to nothing while serving to reduce the potential for customer complaints. Dell is often besieged with complaints when shipment dates for its computers are extended—something that also opens the door to competitors selling products containing computers with chips from Advanced Micro Devices.
But Northwood chips cost the same from Intel, perform similarly at the same clock speed and can fit into the same computers as Prescott chips. This allowed Dell to easily swap the two. Dell's Dimension XPS game machine now offers 3.2GHz and 3.4GHz Northwood Pentium 4s or a 3.2GHz Pentium 4 Extreme Edition. The company also switched its Dimension 8300 to 3GHz and 3.2GHz Northwood Pentium 4s. It already offered the 3.4GHz Northwood and the 3.2GHz Extreme Edition chips.
"If you look at (performance) benchmarks, Prescott has advantages in certain things, but they're the same clock speeds, and in a lot of cases—such as in general computing tasks—they have very similar performance," Menchaca said. "If there was one that was clearly faster than the other, that'd be a factor. That's the kind of thing we look at—it's not just the amount of processors we can get."
Dell still plans to move back to Prescott and offer the 3.4GHz Pentium 4 Extreme Edition and 3.4GHz Prescott Pentium 4 once those chips are easier to get, Menchaca said.
HP has also felt the effects of short supply, a company executive said.
"We're using (Prescott), but somewhat selectively," said Bruce Greenwood, director of product marketing for HP's Consumer Computing Organization in North America. "Supply is a bit constrained. But we're able to work with Intel on this and get what we need."
HP's new Pavilion a500y, a configure-to-order desktop, can be ordered with a 2.8GHz, a 3GHz or a 3.2GHz Prescott Pentium 4. But a customer who desires a 3.4GHz Pentium 4 can only order a Northwood version of the chip from HP right now, he said.
Chip shortages have spelled some trouble for Intel a few times in the past. During 1999, the company released a new generation of Pentium III chips, dubbed Coppermine, and shortages quickly resulted, angering customers with relatively long lead times. During a similar situation in November 2001, Dell pulled Intel's 2GHz Pentium 4 from its Web site, much like it did with the 3.4GHz Pentium 4 Extreme Edition, citing short supplies that stretched out lead times on its desktops. The 2GHz chip was relatively new at the time.
Although some of Intel's biggest customers want the giant to crank out more Prescott Pentium 4 and Pentium 4 Extreme Edition processors, Intel may well contend that its Prescott manufacturing ramp is on track. Intel designed the chip to stick around for awhile, declaring it will offer consumers more multimedia oomph and run up to 4GHz by the end of the year.
The chipmaker, which reports first-quarter earnings on Tuesday, is likely to give at least some information on Prescott's status. However, a company spokesman declined to comment for this story.
Meanwhile, even though it's on hiatus from the Dimension XPS, the 3.4GHz Pentium 4 Extreme Edition processor can still be found in Dell's Inspiron XPS notebook, a high-end machine designed for tasks such as gaming. Lead times for an Inspiron XPS fitted with the chip have been running around 30 days. It's also available in desktops from companies such as Alienware and Voodoo PC.