Notebook prices, which have remained relatively stable compared with the plummeting prices of desktop PCs, should begin to drop more quickly beginning this Autumn, partly due to Intel's plans to cut prices on its mobile Pentium II processors in September - the first step in a broader plan to lower the cost of notebooks. In the first quarter of next year, the company plans to launch a version of its Celeron processor for "basic" notebooks, according to sources. The first mobile Celerons will run on a 233MHz chip, with 266MHz and 300MHz CPUs to follow, sources said. A low-priced, limited-function chip set for Celeron portables, the 440DX, will debut in the first half of next year. Intel is also designing standard mobile processor packaging to help OEMs build lighter, smaller systems. The price cuts and new components should enable notebook makers to build systems for around $1,500 (£914) without skimping on technology. Such devices will give IT managers more affordable options for mobile users. "The growing diversity in form factors is improving the value equation," said Chuck Clabots, vice president and CIO at United Behavioural Health, whose employees use a mix of units ranging from palm-size devices to high-end notebooks. Intel's new mobile processor packaging, which it plans to release in the first half of next year, will open the door to more thin-and -light form factors, sources said.

Intel processor	Current Price	Expected September Price
300MHz Pentium II	N/A, $635	(£387)
266MHz Pentium II	$445 (£271)	$390 (£237)
233MHz Pentium II	$260 (£159)	$210 (£128)
266MHz Pentium MMX	$240 (£146)	$160 (£98)
200MHz Pentium MMX	$95 (£58)	$95 (£58)

For example, a 333MHz Pentium II will be available in a tape carrier package which is very thin and in widespread use today for older processors. Today's Pentium II chips are packaged in a mobile module, which is somewhat bulky and cannot fit into ultrathin notebooks such as the IBM ThinkPad 560. Intel's thin-and-light work is significant because OEMs are forced to design their own thin systems, since no standard thin packaging exists for state-of-the-art processors. However, when Taiwanese OEMs, which build most of the notebooks sold in this country, have a standard design to work with, volumes traditionally increase and prices fall. Intel also is developing what could be a breakthrough in power conservation, under a project code-named Geyserville. Starting early next year, Intel's mobile Pentium II processors will run at one of three power states-AC, DC or docked. Each state will be defined by a fluctuating core operating voltage and frequency. The goal, according to sources, is to automatically vary the power consumption between states to save battery life. The transitions between states will be managed by an Advanced Configuration Power Interface BIOS, sources said.