Intel and Advanced Micro Devices will cut desktop chip prices in the next few days to usher in the holiday PC-buying season.

Intel will reduce the cost of its Pentium 4 desktop chips by between 7 percent and 35 percent on Oct. 26, with the most expensive chips receiving the biggest whack, according to sources close to the company. The 3.2GHz Pentium 4 will drop from $637 in volume quantities to $417, a 35 percent drop, while the 3.0GHz Pentium 4 with an 800MHz system bus will decline from $417 to $278, a 33 percent reduction.

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