You have hit on the problem, actually, but I view it much differently than you. People that want cheap, inexpensive boxes dont need the graphics power of an APU, a pentium, or even celeron is fine for them. The APUs are kind of "tweeners" that are more gpu than 90+ % of the users need, but not really powerful enough for uses who want graphics power. They are relegated to a niche, those who want as much graphics power as they can get without adding a discrete card. It also doesnt help that the low end "dual core" APUs with only one module are pretty weak in cpu performance. Their real place is in mobile, but so far, due to using a lot of power, they lose much of their performance advantage in the mobile space. Perhaps mobile Kaveri will improve on this, but that is yet to be seen, and by the time it comes out, it will be nearly time for Broadwell mobile.
Eh, we can talk mobile Kaveri when it show up in the flesh.
This chip is a radical change in what a cheap computer is and what it can do.
This is the PC equivalent of the PS4 and xBox 1 design choices; something capable for now AND the future that can be massed produced easily / cheaply.
Intel low end is still in the "good enough" camp.
They made the on-chip Intel HD Graphics good enough for current (Netlfix / internet streaming video being the "killer app" for most non-power users) basic usage; they still kinda stink for games.
When average user looks at specs and realizes AMD is selling them 4 cores and a better than "good enough" graphics product (mfgs might sell the A8-7600 for more than a Celeron or Pentium, but not priced out of consideration), they will buy it.
