AMD and Intel have both been extremely aggressive in claiming that they are not engaged in a price war with each other. They are probably right, what has been going on is more like a chess game. Following Intel's move, the recent price cuts announcement, AMD have reacted with a sneaky reduction which has not yet been officially announced.
What this means in numbers is that the 1.3GHz Athlon price will drop by 45% from $318 to $175 and the 1GHz model will drop 31% from $204 to $140. These cuts are also meant to ease the introduction of the 1.4GHz Athlon awaited in a few weeks.
While these drops seem impressive they are merely changes in official prices, since these chips have been selling under the official price for a few weeks now. The price of the 1.3GHz chip has ranged from $193 to $203 at retail, approximately the same as a 1.3GHz Pentium 4. The 1.2GHz Athlon sells officially for $294 at wholesale, but can be bought at retail for $153 to $166. These variations are a result of AMD's wholesale tactics, since volume wholesalers get to negotiate their price individually.
These price cuts could be viewed as an Intel victory since they have achieved to force AMD to lower its high end processor prices, while still competing with Intels' low end product. This means that Intel seem justified to offer their Pentium 4 1.7 GHz model for a higher price.
This victory will only be valid if consumers pay no attention to various benchmarking tests which seem to indicate that AMD's 1.3GHz Athlon performs almost as well as Intels' more pricey Pentium 4 1.7GHz chip.
