INTEL, AMD AND THE CONSUMER

15. July 2006, 17:41 | by WD Milner | Full Article |

While competition is invariably good for advancement of technology, and is generally good for the consumer - it can often lead to questions about how much better it might have served the consumer.

There has for years been a constant and fierce battle for the end-user dollar between Intel and AMD in the processor market. While not perhaps as cut throat as that in the graphics market, it is certainly higher profile in the public perception.

The recent release by Intel of their new “Core 2™” series of processors, popularly known as Conroe after the development model name, which in most benchmarks are a bit faster than the top AMD desktop processors was in itself not unusal. The pricing of these however, coupled with the improved performance and reduced power requirements have made them a bit of a sensation.

Not surprisingly, and in self-defense, AMD has slashed prices dramatically on its own processor lines. And it is at this point that one has to stop and think long and hard at the implications.

AMD 64 processor prices ranging in speed ratings from 3200+ to 5000+ have been dropped anywhere from 20% to a whopping 50% in the last couple of months. This is a reduction of anywhere from $40 to $500 per processor. Price reductions have not been quite as spectacular among the FX series but have still been substantial.

The question that comes to mind is that, if AMD can still sell processors at a profit using this pricing model (and this does appear to be the case) one can only marvel at how heavily consumers pocketbooks were being milked. Intel are not blameless in this - they dropped their prices on processors as well though the focus of price drops in the tech media continues to be AMD.

Now, I don't think anyone objects to a business making a profit, but when the price can drop by 30% and have that equate to $500 (and still make a profit, one really has to start to wonder.

There is, however, due to the nature of the semiconductor industry, little reprieve likely for the public as can be seen in how long memory manufacturers went before getting caught for price fixing. VIA processors, while mostly software compatible, are mostly a niche market for low power processors. IBM and Motorola PowerPC offerings are primarily restricted to the embedded and workstations markets and the price is prohibitive and faces operating system inertia in the general marketplace (eg pre-Intel Apple). The Sun SPARC faces the same issues. The Alpha under DEC had potential but it is now owned by Intel and has basically died a premature death.

What does that that leave the public? Right back to the Intel-AMD duopoly (an effective one if not a legal one) and prices as high as the market will bear. It is no wonder that older components for the price conscious are hot commodities on eBay. Especially when, for the majority of computing tasks, they can be more than capable at a small fraction of the price of the truly “bleeding edge”.

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Categories: ,
Keywords: intel,amd,via,sparc,price,conroe,core 2,alpha

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