Two months ahead of schedule, Intel is releasing a new quad-core chip, expanding its Xeon family and taking one final swing at rival AMD before the end of the year, according to analysts.

Intel is shipping the Xeon E5335, an addition to its 5300 series of quad-core processors. It's the fifth quad-core processor that the company has released since entering the quad-core realm this fall. Intel calls the E5335 chip, which runs runs at 2GHz with a 1333 MHz front-side bus, the "next frequency down-bin." That means it's a slower processor and will come in cheaper than the higher-performance quad-core processors.

The early release of yet another quad-core processor is Intel's way of taking one last jab at AMD before the year closes out, according to Charles King, principal analyst of Pund-IT Research.

"What Intel has been doing in 2006 is demonstrating that it can innovate when it needs to and hit its delivery schedule when it's critical," said King. "Those have been issues that have plagued some products like the Itanium platform. This year we've seen Intel refresh its whole product lineup. I think this was more about proving that the company still has its chops and it's still capable of delivering high-quality products on schedule than a real demand in the market for quad-core chips."

A spokeswoman for Intel said the new processor was originally planned for this coming February but several of the company's OEMs requested that they release it early to support IT purchases in January.

Intel may have been feeling some pressure since AMD demonstrated the first native quad-core x86 server processor at its annual Industry Analyst Forum on Nov. 30. AMD executives are quick to point out that AMD is working on a true four-core processor, where Intel's quad-core line is based on linking to dual-core processors together. "So far, none of them from Intel have been true quad-core," said Dan Olds, CEO and a principal analyst at the Gabriel Consulting Group. "AMD's set up is a purer four-core." Olds added that Intel's latest chip will broaden the company's quad-core offering and set up more competition for AMD to face as it puts together its own quad-core line up due out next summer.

The last three years have been difficult ones for Intel, said King. The company still is the volume leader in the X86 market and unquestionably the market leader on the PC side. At the same time, though, Intel made some serious missteps in the server space that resulted in AMD having a clear field of fire with its Opteron series, delivering the first 64-bit X86 architecture. King called that Intel's grievous error.

As a result, AMD basically went from nowhere to between 25 percent and 30 percent market share for the X86 realm. "Intel still has a clear lead over AMD but due to its own mistakes it gave a quarter to a third of its market share away by pursuing a strategy that customers and ISVs were not interested in," said King "I think 2006 has really been about Intel showing the market that its still a clear leader in innovation and can make great products."

The Xeon 5335 has a starting price of $690 for shipments bought in quantities of 1,000.