By Elinor Mills Abreu

SAN FRANCISCO (Reuters) - Intel Corp. (NasdaqNM:INTC - news) on Thursday rolled out its fastest yet microprocessor with new technology to speed the performance of PCs and widen the gap with its nearest rival, Advanced Micro Devices Inc.(NYSE:AMD - news)

While the new 3.06 Gigahertz Pentium 4 processor will lend more muscle to PCs, analysts said the new product was not likely to jump-start stagnant PC sales.

Dell Computer Corp. (NasdaqNM:DELL - news), Gateway Inc. (NYSE:GTW - news), Hewlett-Packard Co. (NYSE:HPQ - news) and five other companies announced computers using the new chips, which feature Intel's Hyper-Threading technology, which allows the processors to carry out more than one string of calculations at once.

Prices for the computers range from $1,200 to $3,000.

The chips themselves are priced at $637, significantly higher than what have been Intel's fastest chips up to now, the 2.8 Gigahertz Pentium 4, the price of which was reduced earlier this week from $508 to $401.

"I don't know if any one chip can change the market," Paul Otellini, Intel president and chief operating officer, told reporters on Tuesday. "I think what you can do is create trends and this is the beginning of a trend."

However, he added, consumers and corporations who have put off purchasing new computers during the economic slowdown will have to replace their older machines sooner or later.

"The machines bought in 1998 and 1999 for Y2K (the year 2000) are not capable of doing the job people will require of them over the next few years," Otellini said. "A lot of enterprise managers are going to have to face that decision, one way or another."

The chips are designed to speed up programs, even when they are running simultaneously, by tricking the software into thinking there are two processors when there is only one. This is a much cheaper alternative to having two processors in a PC.

The processor will work even better with software that has been "threaded," or written to allow two functions to be executed simultaneously, such as Microsoft Corp.'s Windows XP (news - web sites) operating system and Adobe Systems Inc.'s (NasdaqNM:ADBE - news) Photoshop, Intel said.

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Emerging Web services, which will enable seamless interoperation between different companies' systems and software, as well as online gaming and electronic learning will help drive the demand for the kind of performance increase the new chip offers, according to Otellini.

Gartner analyst Mark Margevicius said the performance boost the new Intel chip will provide may not be worth the price for many people.

"Lots of customers are saying they're more than satisfied with the performance of their PC," he said. "If it's not broken, why replace it?"

Chief financial officers, who often sign off on the technology purchases, are more focused on saving money than increasing worker productivity at this point, according to Margevicius.

"The economy is so soft... every nickel counts," he said. "So if they can extend (use of) the machine they'll do so."

Intel's new chip will appeal more to power PC users than mainstream users, said Kevin Krewell, senior editor at industry newsletter Microprocessor Report.

That will limit demand, especially since there are plenty of good PCs out there that are cheaper, he said.

"Intel is trying to innovate themselves out of this recession in the desktop PC market and they're hoping to spark some new interest," Krewell said. "But whether it is enough to ignite a renaissance in the desktop PC space, I don't think it is there.

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