The move follows lower-than-expected sales of microprocessors due to economic weakness in Europe and China, in addition to news of Apple's (ARM-powered) iPad dipping into notebook sales. It isn't clear whether there is any correlation between the reductions and those reports.
Burleson believes the bargain chips will mostly cause system builders to stock up on parts. However, the cuts will also boost notebook sales in the short-term, as Acer, Lenovo and HP have lowered notebook prices. Nonetheless, the analyst expects demand to slow in the fourth quarter as consumers await the arrival of Intel's next-generation Sandy Bridge products.
When or if the savings will trickle down to the desktop retail space isn't mentioned. Intel said it wouldn't comment on any pricing beyond its public 1KU price list posted on intc.com.