Intel's next generation Xeon processor, essentially a Pentium II with a lot of L2 cache, is going to be causing some groans from those who won't be able to afford it. Historically, Intel's new chips have been priced at a premium, but the Xeon will take this tactic into the stratosphere. Just how expensive will these new chips be? Well, a 400 MHz Pentium II Xeon with 2MB of L2 cache will run about $4500, just for the processor. And that's volume pricing. A version with 1 MB L2 cache will cost $2800, while the 512KB L2 cache version will run about $1100.
As a result, Intel's desire that these CPUs only be used in high-end servers will be taken very seriously. Xeon systems are expected to sell in the $10,000 to $25,000 range when they go on sale in July. Part of the cost is attributed to the huge packaging of the Xeon: Like the Pentium II, the Xeon will come packaged in a black cartridge. However, the Xeon cartridge is twice as large as the Pentium II cartridge so that it can accommodate the extra L2 cache.
After the 400 MHz Xeon debuts in July, a 450 MHz version will appear in late 1998. Xeon systems running at 500 MHz and higher will come out during 1999