As expected, the chipmaker on Sunday cut list prices by as much as 14 percent, to below $100, on its Celeron processors for low-priced desktop PCs. The cuts pave the way for the introduction of a 2.7GHz desktop Celeron in the future.

Intel typically schedules its price drops and communicates them to PC makers well in advance. However, the Santa Clara, Calif., company also uses pricing as a tool to make room for new chips, motivate PC buyers or prod PC makers to move up to faster processors. It does so by reducing the price on the faster chip so that it's the same as the slower chip's price.

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