Originally posted by: Extelleron
When it comes to one company dominating the market, it may seem odd, but so far at least Intel has been much kinder to consumers dominating the market with Core 2 than AMD did when they dominated with Athlon 64.
From 2003 till the release of C2D in 2006, AMD really took advantage of their performance lead and charged top dollar for everything. Even in early 2006, I remember paying $170 for an Opteron 144 - a 1.8GHz single core. A year later, I bought a dual-core X2 3600+ for $60. AMD didn't release a single dual core below $300 despite Intel having duals as low as $130 (Pentium D 805) prior to C2D. When C2D came out and blew AMD away, Intel offered the E6300 (much faster than the $300 X2 3800+) for $183. Intel was pricing its quads at $266 before AMD even had a competing part out.
So in reality, big bad Intel (how AMD fanboys like to view them) has actually been much kinder to consumers than AMD.
That is an incorrect analysis.
You seem to be off already on the first step when you compare pricing on a server segment CPU with pricing on desktop/consumer segment CPUs. But lets leave such details and go directly to the main issues:
Neither AMD's nor Intel's pricing have anything at all to do with kindness to the consumer. There is ultimately only one agenda on the table: Earn money for the share holders. And earn
as much money as possible. A staff that doesn't serve this agenda, should by traditional business logic be fired. There is however always a complex set of both short term and long term considerations that affect strategies and actions.
If you would revisit current Intel pricing you should be able to observe one thing. Every processor that Intel considers to be competing with AMD has a depressed price. Leaving the AMD competition zone there is a pretty huge jump in pricing. And you are blaming AMD for high prices on CPUs, in the past, where there wasn't any Intel competition?
But it's not just competition. This goes even beyond normal competition. Intel is pushing their prices low not just to sell (which they do anyway) but to push AMD's prices down
to keep AMD in red! That's the main purpose of Intel's pricing currently, not maximizing profits. And it has a reason. The legal proceedings AMD has initiated against Intel. That case looks pretty bleak from Intel's point of view and it is of paramount strategic importance to Intel to see to it that AMD is in as poor financial shape as possible. Anything that happens to AMD, restructuring or bankruptcy is very good for Intel. At the end it's possible to make very shameful deals with an opponent that doesn't have much choice. It's not the first time they are doing this either. They did it to DEC, for instance, after having stolen much of the technology to build Pentium and PentiumII/Pentium Pro. Crime absolutely pays in USA, even if you get caught, if you're big and rich enough. Exxon knows it, MS knows it and Intel definitely knows it.
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How does competition affect the x86 market situation? Well, it drives technology forward and prices downward, of course, but it's maybe more interesting to consider a different aspect:
- It compresses it!. Consider the low priced desktop CPUs today and the top end server CPUs. Remarkably similar features and performance, don't you think? From that aspect it doesn't look as if prices are compressed. But actually they are. It's just the extreme ends sticking out a bit. That would always be the case anyway. But both the technology/performance range and pricing is compressed over the main production items.
How would a x86 manufacturer act if it didn't had to adapt to a market situation shaped by the presence of a competitor?
Well, one thing that would seem pretty obvious is to maximize charges from every market segment. Some market segments are able to, and prepared to, pay more for features that they think they need, so they should be forced to do so. That's simple and self-evident.
That also means that lower market segments will not be able to get access to certain new features. A sole x86 manufacturer is able to shape the market and define the market segments at it's leisure. It's also an excellent way of controlling upgrade needs and generation shifts to keep the market rolling. And it will absolutely certainly do so! In order to maximise earnings for its shareholders. Changes will come slowly, but they will come and over time the x86 market will become quite different from today. AMD would have done it too. It's not a question of evil or good company. It's 'sound' business practice.
A stretched x86 market range will also make things easier for MS in motivating their similar segmentation strategy with different licensing, as well as upgrades/generation shifts, so I'm pretty sure they will look rather kindly on a stratification of x86 features. It will be a bit more fuzz, but compared to how much more money they can make for the effort, it's nothing.
Consumers? They're royally screwed of course. But don't worry - most of you won't feel a thing. Is that a bit too cynical from me? Nah - I don't think so.
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