Two rival companies that sell machines designed to scan genes and find clues to curing diseases are in a price war -- one that could end up accelerating genetic research.

A big misstep last year by long-standing market leader Affymetrix Inc. handed the hottest part of the market to its nimble young rival, Illumina Inc. The two companies are battling it out to sell equipment for "high through-put genotyping" -- a market now roughly $200 million to $350 million a year in sales and growing by 25 percent to 40 percent a year. Most of that is in gene chips and scanners used to perform DNA sweeps of thousands of people to find the genes linked to cancer, asthma, autism and other conditions.

Genotyping is far broader than the kind of genetic screening that tells individuals about their personal health. Rather, genotype scans seek to locate and identify the genes that predispose groups of people to certain chronic diseases such as heart disease, cancer, or neurodegenerative conditions such as amyotrophic lateral sclerosis, known as Lou Gehrig's disease. But the discoveries made by such scans are expected to eventually lead to new genetic diagnostic tests and therapies that can find and treat a range of genetic illnesses.

DNA-reading machines are big-ticket purchases that labs weigh carefully every three to five years. Big labs may install up to $4 million of equipment, Illumina says. And just as computer printers generate sales of ink cartridges, selling a genotyping machine triggers two to three times more revenue in ongoing sales of the gene chips needed to do the scanning.

The gene chips, which typically cost $300 to $800 apiece, are glass or plastic plates studded with probes that tease out single nucleotide polymorphisms, or SNPs, which are misspellings in the genetic code that act as signposts marking disease genes. The chips are essentially loaded with SNPs, allowing them to identify similar mistakes in the genetic material that's being tested.

Affymetrix of Santa Clara, Calif., invented the market for commercial gene chips 18 years ago. "Affy" -- by far the bigger company, with 1,500 systems installed world-wide and a wider product line -- still dominates the broader field of genetic analysis. But just over a year ago, Affymetrix rushed to unveil its new-generation chip that squeezed half a million SNPs on a single, two-chip product for genotyping. In its haste, it stumbled.

The product was under-tested, and had flawed software. It took five months, a new software download, and delivery of new chips to fix the problem, according to Affymetrix. The company's stock plunged by half to the $25 range. In 4 p.m. composite trading Wednesday on the Nasdaq Stock Market, Affymetrix shares were down 5 cents to $24.13.

Meanwhile, Illumina of San Diego, Calif., which was founded in 1998 and entered the business of large-scale genotyping analysis about six years ago, has grown in sales and stock cachet, its share price nearly quadrupling to roughly $40 from around $10 over the last 18 months. Illumina shares Wednesday fell 40 cents to $38.97.

To regain its market, Affymetrix in July announced a 50 percent price cut for the chip that holds 500,000 SNPs, to $250. About a month later, Illumina restructured all its list prices downward "to create a more rational structure" after heavy discounting to some big customers, Illumina's CEO Jay Flatley said in an interview. A spokeswoman declined to reveal Illumina's prices.

Researchers say increasing affordability allows their labs to do more, bigger or different scans, boosting the chances to find genes related to diseases. Even the companies jockeying for dominance agree a more competitive marketplace ultimately will benefit patients because it drives innovation and accelerates the pace of discovery, eventually leading to faster, better diagnosis and more targeted treatments for gene-based diseases.

In November, scientists using Affymetrix equipment reported discovery of a gene involved in a type of Lou Gehrig's disease. This month, a U.S.-Canadian research team using Illumina tools reported identifying a gene linked to inflammatory bowel disease. Both discoveries offer targets for researchers to use in developing diagnostic tests and treatments.

"If you cut price in half I may end up doing more than twice as many experiments," says Norman Gerry, chief of Boston University's genotyping facility, which has $1 million of Affymetrix equipment. He's using it in a study that will scan the genomes of 310 African-American families for genes linked to higher risk of diabetes and cardiovascular disease.

Amid current discounting, Aravinda Chakravarti's lab at Johns Hopkins University School of Medicine in Baltimore has undertaken bigger scans. The lab is looking at "twice as many samples in the autism studies since the chance of finding genes increases with larger sample size," says Dr. Chakravarti, director of the prestigious McKusick-Nathans Institute of Genetic Medicine. Dr. Chakravarti uses both companies' products, though he sits on the scientific advisory board of Affymetrix, a paid position.

Affymetrix says the July price cuts boosted its sales 90 percent in the third quarter over the preceding period. "We provide the most raw genetic power per dollar of any provider out there," says Sean George, vice president of academic business for Affymetrix.

Illumina envisions 2006 revenues of $178 million to $182 million -- more than two-and-a-half times 2005 revenues of $73.5 million. The company recently acquired Solexa Inc. of Hayward, Calif.

For its part, Illumina doesn't acknowledge a price war, saying that it was offering discounts on chips to its biggest customers even before Affymetrix's July cut. It positions itself as the high-end model in the market. "We have some fundamental advantages in our technology," says its CEO Mr. Flatley. "We think those advantages allow us to command premium pricing over what Affy can do."

In the high-tech world of scientific research, the choice of machinery isn't only about price, of course. While Illumina designed its gene chips using data from the huge global gene-mapping effort known as the International Hap Map project, Affymetrix designed its gene chips independently. This distinction -- along with price and performance -- affects customer choices about which equipment to use.

In Woodbridge, Ill., Jeffrey Gulcher, chief scientific officer of deCode Genetics Inc., says he did a year of due-diligence before choosing Illumina for his company's research into genes for cardiovascular disease, cancer, diabetes and other ills.

"Affy is cheaper, significantly cheaper than Illumina," says Dr. Gulcher. "In our case, we want high-quality data, and were willing to pay to make sure."

But Affymetrix also has staunch fans. "It's almost a religious thing whether you're an Affymetrix or Illumina person," says Dietrich Stephan, deputy director of the nonprofit Translational Genomics Institute of Phoenix.

From his lab outfitted with six Affymetrix scanners, at $250,000 each, Dr. Stephan leads a network of genetic labs scanning for the genes involved in Lou Gehrig's disease, Alzheimer's, multiple sclerosis, diabetes and bipolar disease. His lab is an "early access site" for Affymetrix equipment, getting new chips early, but he says he isn't paid by the company.

The lab continued to work with Affymetrix after the company's recent misstep. "We're very practical," Dr. Stephan says. "Affymetrix stuff works. We weren't about to throw away a million dollars worth of stuff, because it works fine."

Affymetrix plans to introduce a one-million-SNP chip in the spring. It has also filed a patent infringement claim against Illumina in the U.S. District Court in Delaware. The case, involving five patents, is expected to go to court in March. Illumina has denied the charges, but faces making royalty payments to Affymetrix if it loses.