Four-way servers that include Intel's next-generation, 64-bit Itanium 2 processor will sell for about $41,000, Intel says. It's an early indicator of Itanium 2 pricing--still undisclosed--and demonstrates how Intel is counting on the new processor to vault its products into higher-priced servers and take market share from Sun Microsystems. Itanium 2 deliveries are expected in July, Intel sources say.

The Itanium 2 server price estimate, disclosed at a technical presentation at Intel headquarters in Santa Clara, Calif., Friday, is for a four-processor system running at 1 GHz, with 32 Gbytes of RAM, and a 3-Mbyte on-die memory cache. Intel released the performance specs for Itanium 2 late last month.

The average selling price of Intel-based servers is much lower. Market researcher International Data Corp. says Intel-based systems account for 88.4% of the unit volume of servers delivered to customers. Most of those servers feature 32-bit Xeon chips, and most Xeon-based systems sell for less than $25,000, Intel says.

The chipmaker is in the midst of a product transition to 64-bit processors, which deliver better transactional performance through a combination of more complex computational ability, the ability to store a larger amount of data near the CPU, and the ability to address much more memory than 32-bit parts. Early versions of IBM DB2 Universal Database, Microsoft SQL Server, Oracle 9i, and other software are available on Itanium, the second product in Intel's 64-bit line. Customers, including Pacific Northwest National Laboratory, the National Center for Supercomputing Applications, Daimler Chrysler, and Reuters, are testing Itanium 2 systems, Intel says.

But 32-bit chips continue to supply the bulk of Intel's sales. Improvements in the Xeon chip are also on tap: It's expected to run faster than 3 GHz next year, compared with a top clock speed today of 2.4 GHz.