Intel wants to charge $50 to use your CPU fully

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Intel wants to charge $50 to use your CPU fully

Postby Internetmeme » Sun Sep 19, 2010 9:06 pm UTC

http://www.engadget.com/2010/09/18/inte ... already-d/
Article:
Spoiler:
Intel wants to charge $50 to unlock stuff your CPU can already do
Hold onto your hyperthreaded horses, because this is liable to whip up an angry mob -- Intel's asking customers to pay extra if they want the full power of their store-bought silicon. An eagle-eyed Engadget reader was surfing the Best Buy shelves when he noticed this $50 card -- and sure enough, Intel websites confirm -- that lets you download software to unlock extra threads and cache on the new Pentium G6951 processor. Hardware.info got their hands on an early sample of the chip and discovered it's actually a full 1MB of L3 cache that's enabled plus HyperThreading support, which translates to a modest but noticeable upgrade. This isn't exactly an unprecedented move, as chip companies routinely sell hardware-locked chips all the time in a process known as binning, but there they have a simpler excuse -- binned chips are typically sold with cores or cache locked because that part of their silicon turned out defective after printing. This new idea is more akin to video games that let you "download" extra weapons and features, when those features were on the disc all along. Still, it's an intriguing business model, and before you unleash your rage in comments, you should know that Intel's just testing it out on this low-end processor in a few select markets for now.

Pics of the cards:
Spoiler:
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So, in a nutshell, Intel is making a new chip that you have to pay $50 to unlock the full functionality, unlocked by downloading software.
Yes, binning has been around a while, but that's usually because the parts locked are messed up.

If I get this chip, I'm not paying $50to use it. I bought it, and I can use it however I want. I'm sure others will feel the same. Because it's software that unlocks it, I'm sure either a hack will be released or the software pirated. It's just not right that Intel can do this. It'd be like releasing an air conditioner, but then requiring you give extra money to be able to cool your house below 80 degrees.
Spoiler:

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Re: Intel wants to charge $50 to use your CPU fully

Postby Bright Shadows » Sun Sep 19, 2010 9:52 pm UTC

Internetmeme wrote:If I get this chip, I'm not paying $50to use it. I bought it, and I can use it however I want. I'm sure others will feel the same. Because it's software that unlocks it, I'm sure either a hack will be released or the software pirated. It's just not right that Intel can do this. It'd be like releasing an air conditioner, but then requiring you give extra money to be able to cool your house below 80 degrees.

If you get this chip, you are paying for a piece of hardware with all the restrictions the manufacturer has placed on it. If you buy it and then complain, it is in effect like buying a screwdriver and complaining that it is not a wrench. If you want a wrench (ie an unlocked piece of hardware) then buy one, don't whine about the screwdriver.

You get what you pay for, so if you want an unlocked product, buy one. If there aren't any, that means you're in the vast minority, but you have options. Making your own, for instance. Petitioning to bring back unrestrained chips. Filing a frivolous law suit, if you're an American.

tl;dr This is stupid for Intel, but it's more stupid that this is in the news.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Minchandre » Sun Sep 19, 2010 9:56 pm UTC

What I want to know is if the locked chip will be sold at a lower price than would otherwise have been the case.

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Re: Intel wants to charge $50 to use your CPU fully

Postby Qaanol » Sun Sep 19, 2010 10:12 pm UTC

This is more like an adjustable wrench that could go up to an inch wide, but it has a little padlock preventing it from being opened more than half an inch wide. The manufacturer will sell you a key to remove the padlock for $50.

Important questions include: is it legal to pick the lock oneself? Is it legal to show other people how to pick the lock? Is it legal to purchase a large quantity of wrenches, pick all the locks, and resell the unlocked wrenches?
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Re: Intel wants to charge $50 to use your CPU fully

Postby Xeio » Sun Sep 19, 2010 10:14 pm UTC

Minchandre wrote:What I want to know is if the locked chip will be sold at a lower price than would otherwise have been the case.
It's probably the same as any other chip binning they do, so likely. Though I think this was mostly for OEMs rather than custom builds (chances are, if you're building a computer, you're not going to buy a chip like this unless you already factored in the "upgrade" cost, or you just plain don't want the upgrade).

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Re: Intel wants to charge $50 to use your CPU fully

Postby PhoenixEnigma » Sun Sep 19, 2010 10:50 pm UTC

I saw this elsewhere, and my first thought was pretty much the same - WTF, Intel? It sounds like Intel noticed what AMD had going on with their ACC* system, and went "Hey, that's neat! I wonder how we can make money from that?"

On second thought, though, there may be some legitimate reasons. I'd imagine that, like AMD, many of Intel's low end CPUs have had perfectly functional units disabled to fit a pricepoint - a practice I don't have an issue with. Most of the Pentium G6950's are probably only missing the microcode to allow the upgrade anyways, and have perfectly fine L3 cache and HT execution units. As this looks to be targeted to OEM systems, I can see the value in a non-warranty-voiding, easy-to-perform upgrade that takes advantage of that fact. It's also half the price of a new CPU, so I guess you could make a case for it being a cost-effective upgrade if you want to try. I don't.

What I'm a little shocked at is the price Intel is asking. This "upgrade" appears to basically turns a $105 Pentium G6950 into slightly slower clocked version of the $120 Core i3-530. $50 for maybe $15 worth of extra performance is, IMHO, price gouging like no tomorrow, particularly in light of what something similar costs on an AMD system (~$0).

I dunno, I can see the point of this, but with Intel locking down the BCLK on most of their upcoming chips as well, I'm starting to get a bad vibe from them.

*For the nontechnical: AMD has been selling CPUs with disabled features (such as one or two cores) for some time now. Sometimes it's because they're defective, sometimes it's to fill market demand at a price point. Some (read: many) AMD motherboards have a feature called ACC that permits the user to take a chance and enable those disabled features. It's been a bit of selling point, as it's fairly common for it to work.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Princess Marzipan » Sun Sep 19, 2010 10:53 pm UTC

Bright Shadows wrote:If you get this chip, you are paying for a piece of hardware with all the restrictions the manufacturer has placed on it.

[...]

tl;dr This is stupid for Intel, but it's more stupid that this is in the news.

There's a growing trend of companies restricting the usage consumers have with products they're ostensibly buying the rights to use completely. And a lot of people find that problematic. Just because you think it's "stupid" for Intel to do this doesn't mean this won't lend legitimacy to that trend. People defend lousy business practices all the time by saying they're "stupid" - workplace discrimination for example. It's "stupid" for a company to discriminate against employees based on race, so obviously the smart business move is not to do that! Except a lot of companies make stupid decisions, and that's their right - but some decisions infringe too far on public and consumer rights. (And by the way, why are you so against this "being in the news"?)
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Re: Intel wants to charge $50 to use your CPU fully

Postby Bright Shadows » Mon Sep 20, 2010 12:19 am UTC

Princess Marzipan wrote:
Bright Shadows wrote:If you get this chip, you are paying for a piece of hardware with all the restrictions the manufacturer has placed on it.

[...]

tl;dr This is stupid for Intel, but it's more stupid that this is in the news.

There's a growing trend of companies restricting the usage consumers have with products they're ostensibly buying the rights to use completely. And a lot of people find that problematic. Just because you think it's "stupid" for Intel to do this doesn't mean this won't lend legitimacy to that trend. People defend lousy business practices all the time by saying they're "stupid" - workplace discrimination for example. It's "stupid" for a company to discriminate against employees based on race, so obviously the smart business move is not to do that! Except a lot of companies make stupid decisions, and that's their right - but some decisions infringe too far on public and consumer rights. (And by the way, why are you so against this "being in the news"?)


I thought about 3 different methods of reply. This seems to be the best one.

If Intel sells their product advertising the reduced speed, they are selling the product with that speed for all intents and purposes. If it can go faster, it doesn't affect the fact that they are selling and you are paying for the same speed agreed upon by both parties.

Can the thing go faster? Sure. It will go faster if you pay more. This makes total sense if you're buying a new chip. Why not when using one you already have?

The advertisement oughn't be for the top performance if you aren't buying, out of the box, the top performance. That's the only useful statement that can be made, and I don't know how Intel is advertising these chips. If you do, and they're advertising dishonestly, shoot me a link. Otherwise, they've only added 'Maximum upgrade capacity' to the list of things to consider when buying a processor and simplified the process of said upgrading considerably.

EDITed out because I was reading your post wrong. Der.


Also, what this has to do with workplace discrimination. I don't get it at all, and you seem to have this as the crux of your post.




I am against this being in the news because the conflicts in the DRoC, global warming, and assorted other, serious issues were here first. Can it be there? Sure. I don't have to like it though, and frankly, I don't. I dislike that this is better news than famine, armed conflicts, and disease could ever hope to be.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Vaniver » Mon Sep 20, 2010 12:27 am UTC

Why does this say "your CPU" instead of "a CPU sold under a locked system"?

Because my Intel CPU is being used fully without extra charges, thank you very much.

(I don't see this revenue model taking off; piracy concerns are significant, and is there really that much consumer surplus to capture between the two price points?)
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Re: Intel wants to charge $50 to use your CPU fully

Postby mmmcannibalism » Mon Sep 20, 2010 12:32 am UTC

Princess Marzipan wrote:
Bright Shadows wrote:If you get this chip, you are paying for a piece of hardware with all the restrictions the manufacturer has placed on it.

[...]

tl;dr This is stupid for Intel, but it's more stupid that this is in the news.

There's a growing trend of companies restricting the usage consumers have with products they're ostensibly buying the rights to use completely. And a lot of people find that problematic. Just because you think it's "stupid" for Intel to do this doesn't mean this won't lend legitimacy to that trend. People defend lousy business practices all the time by saying they're "stupid" - workplace discrimination for example. It's "stupid" for a company to discriminate against employees based on race, so obviously the smart business move is not to do that! Except a lot of companies make stupid decisions, and that's their right - but some decisions infringe too far on public and consumer rights. (And by the way, why are you so against this "being in the news"?)


Even under the assumption that work discrimination should be banned, its a separate issue from whether a company should be able to sell a product in a specific way. This is especially true if the way they are trying to sell it has nothing to do with safety; intel is making an offer, you can buy the chip at lower speed or pay more for the superior product. If a store wants to sell banana peels for 10 cents and says we will sell you a peel with a banana in it for one dollar/pound they have every right to do so.

edit--Is there any way in which this does not resemble a company selling software that upgrades an old system?
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Re: Intel wants to charge $50 to use your CPU fully

Postby Kag » Mon Sep 20, 2010 12:33 am UTC

Is there even a legal framework for selling the license to use a physical object?
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Re: Intel wants to charge $50 to use your CPU fully

Postby Goplat » Mon Sep 20, 2010 2:06 am UTC

Okay, so they sell you a crippled chip for $X, and charge you an extra $50 to uncripple it. Since they are willing to sell the crippled chip for just $X even though they had to manufacture it with full functionality, $X must be a fair price for a fully functional chip. So:

If you don't upgrade, you paid $X for something worth less than $X. You're getting ripped off.
If you do upgrade, you paid $X+50 for something worth at most $X. You're getting ripped off; Intel gets an extra $50 of rent.

What the hell, Intel? You're supposed to be the good guys of the PC industry (in contrast to the software side, which has always been scummy).

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Re: Intel wants to charge $50 to use your CPU fully

Postby EmptySet » Mon Sep 20, 2010 2:24 am UTC

Goplat wrote:Okay, so they sell you a crippled chip for $X, and charge you an extra $50 to uncripple it. Since they are willing to sell the crippled chip for just $X even though they had to manufacture it with full functionality, $X must be a fair price for a fully functional chip. So:

If you don't upgrade, you paid $X for something worth less than $X. You're getting ripped off.
If you do upgrade, you paid $X+50 for something worth at most $X. You're getting ripped off; Intel gets an extra $50 of rent.


Yeah, I don't get how that is supposed to work, or why anyone would want to buy such a chip. It seems like creating the unlocking mechanism itself would increase production costs over making regular chips, which would drive the price up even further, with no benefit to the consumer. It's like if you went into a cafe and asked for a small coffee, and they poured you a large and then threw half of it out, thus wasting ingredients and driving up costs for no good reason.

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Re: Intel wants to charge $50 to use your CPU fully

Postby Khalid » Mon Sep 20, 2010 2:35 am UTC

Vaniver wrote:Why does this say "your CPU" instead of "a CPU sold under a locked system"?

Because my Intel CPU is being used fully without extra charges, thank you very much.


So you overclock?

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Re: Intel wants to charge $50 to use your CPU fully

Postby phlip » Mon Sep 20, 2010 3:23 am UTC

Goplat: you're conflating "Intel is capable of producing a chip and selling it for $X" with "$X is the right price for this chip". In particular, you seem to be assuming that because $X is a fair price for a powerful but locked chip, then $X must be a fair price for the same chip unlocked.

Compare these two scenarios:
One seller makes two chips - one powerful, one less so. The low-power one they sell for $X, the high-power one they sell for $X+50.
Another seller makes one chip of equal power to the first seller's high-power chip, but locked down to perform equally to the other seller's low-power chip. They then sell this for $X and a one-use unlocking tool for $50.
From a consumer's point of view, these two models are pretty similar. Whether the consumer wants a low-power or high-power chip, they'll be paying the same amount. The main difference, price-wise, is that if you buy the low-power option and then change your mind and want to upgrade, with the latter model it'll cost you $50, but with the former model it'll cost you $X+50 minus whatever you can get selling your existing chip second-hand. Other than that, the only differences are external - whether it'd be possible to unlock the chip without buying the unlocker, whether it'd be legal to do so, and so on. Also, whether it'd be cheaper to engineer and manufacture one chip with two modes than two different chips. That sort of thing.

Personally, as long as the chip is priced appropriately for its locked-down performance, and advertised at that locked-down performance (with the performance it's technically capable of, if mentioned at all, only mentioned in the context of the additional cost of the unlocker), then I don't see any moral problems with Intel taking this path. Whether it'll work or not is a different question, of course.

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Re: Intel wants to charge $50 to use your CPU fully

Postby PhoenixEnigma » Mon Sep 20, 2010 3:56 am UTC

phlip wrote:Compare these two scenarios:
One seller makes two chips - one powerful, one less so. The low-power one they sell for $X, the high-power one they sell for $X+50.
Another seller makes one chip of equal power to the first seller's high-power chip, but locked down to perform equally to the other seller's low-power chip. They then sell this for $X and a one-use unlocking tool for $50.
From a consumer's point of view, these two models are pretty similar. Whether the consumer wants a low-power or high-power chip, they'll be paying the same amount. The main difference, price-wise, is that if you buy the low-power option and then change your mind and want to upgrade, with the latter model it'll cost you $50, but with the former model it'll cost you $X+50 minus whatever you can get selling your existing chip second-hand. Other than that, the only differences are external - whether it'd be possible to unlock the chip without buying the unlocker, whether it'd be legal to do so, and so on. Also, whether it'd be cheaper to engineer and manufacture one chip with two modes than two different chips. That sort of thing.
My problem is that your proposed scenario doesn't match reality. Try this:

One seller makes two chips - one powerful, one less so. The low-power one they sell for $X, the high-power one they sell for $X+15.
Another seller makes one chip of equal power to the first seller's high-power chip, but locked down to perform equally to the other seller's low-power chip. They then sell this for $X and a one-use unlocking tool for $50.

It's basically a ploy to charge $X+50 for a product worth (and sold by Intel for!) $X+15.

If I trusted Intel and OEMs to be honest and forthcoming, I'd say I'd expect it to be an utter failure in the market as consumers realize it is, in essence, a scam, but I'm pretty sure Intel just lost a lawsuit regarding improper dealings and incentives with OEMs. This time around there's no competitor being screwed over to sue Intel, either.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Telchar » Mon Sep 20, 2010 4:54 am UTC

Vaniver wrote:Why does this say "your CPU" instead of "a CPU sold under a locked system"?

Because my Intel CPU is being used fully without extra charges, thank you very much.

(I don't see this revenue model taking off; piracy concerns are significant, and is there really that much consumer surplus to capture between the two price points?)


I can actually see this working out fairly well. Especially on family PCs and for those who are less savy than the average xkcd user. My girlfriend doesn't use her laptop for much more than watching Hulu and schoolwork, but if I wanted to use it for gaming I could pay an extra 50 dollars and get better cpu speed? Or a family computer where the child is getting older and is playing more resource heavy games/software? Obviously you wouldn't buy the chip to build your computer, but it's not a bad option for a lot of people.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Aikanaro » Mon Sep 20, 2010 5:01 am UTC

Qaanol wrote:Important questions include: is it legal to pick the lock oneself? Is it legal to show other people how to pick the lock? Is it legal to purchase a large quantity of wrenches, pick all the locks, and resell the unlocked wrenches?

This is what I'm mostly curious about, as well as the legality of simply mass public announcements of websites that will unlock it for free.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Goplat » Mon Sep 20, 2010 5:07 am UTC

phlip wrote:Goplat: you're conflating "Intel is capable of producing a chip and selling it for $X" with "$X is the right price for this chip". In particular, you seem to be assuming that because $X is a fair price for a powerful but locked chip, then $X must be a fair price for the same chip unlocked.
I'm not assuming it, it is a fact which can be proven correct. Elementary microeconomics tells us that an efficient allocation of resources requires that each product's price be equal to its marginal cost (P = MC). Since the locked and unlocked chips are identical to manufacture and in fact are coming out of the same fab, they have the same marginal cost. It's impossible for $X and $X+50 to both equal MC, so there must exist at least one inefficiency. There is less wealth than there could be; the proverbial pie is being shrunk.

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Re: Intel wants to charge $50 to use your CPU fully

Postby phlip » Mon Sep 20, 2010 5:15 am UTC

OK... but now you're conflating being inefficient with being evil.

I was under the impression that the correct price to sell a product for is the price which gets you the highest profit. Not the lowest possible amount that you can bear. The cost of manufacture doesn't directly affect that value, though it does indirectly by changing the profit calculation. So if people are willing to pay $X for something, you'd be silly to sell it for less than $X, even if you'd still make a profit at the lower amount (and would have a more efficient market at that price).

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Re: Intel wants to charge $50 to use your CPU fully

Postby Zamfir » Mon Sep 20, 2010 5:32 am UTC

I would guess this option isn't really intended for the private market. It is perfect for companies like dell, who can now put CPUs on motherboards in China, ship them to markets, and only then decide whether to sell them as low or high budget systems. So they do not have to guess in advance what the market wants. Presumably, they don't pay 50 bucks extra, but the normal price they would pay for a higher range CPU.

The option that consumers can upgrade themselves seems more a side product, and Intel is now trying whether people are interested. If they are not, they keep the option in the oem market.

I can see some appeal for consumer-upgradable cpus in the laptop market, where the cpus are soldered on. I think there are more and more other systems too with soldered-on cpus.

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Re: Intel wants to charge $50 to use your CPU fully

Postby Xeio » Mon Sep 20, 2010 5:38 am UTC

PhoenixEnigma wrote:One seller makes two chips - one powerful, one less so. The low-power one they sell for $X, the high-power one they sell for $X+15.
Another seller makes one chip of equal power to the first seller's high-power chip, but locked down to perform equally to the other seller's low-power chip. They then sell this for $X and a one-use unlocking tool for $50.

It's basically a ploy to charge $X+50 for a product worth (and sold by Intel for!) $X+15.
Except that's a really poor analogy, because then everyone (who wants the higher performance) buys the first seller's chip for $X+15 rather than $X+50 (unless of course they'd rather pay X now, and unlock it at some nebulous point in the future when they need it, but that's unrelated). The only way this doesn't happen is if you have some sort of restriction (say, for example, an OEM that only offers one or the other) or deception by the second seller (which would generally be illegal).

And this still doesn't account for the fact that they already sell the same chips at different speeds. See: i7 920/930, or any other numerous examples

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Re: Intel wants to charge $50 to use your CPU fully

Postby Goplat » Mon Sep 20, 2010 5:43 am UTC

phlip wrote:OK... but now you're conflating being inefficient with being evil.
Well, artificially lowering our standard of living by some small amount may not be tying-a-damsel-to-the-railroad-tracks evil, but it's still bad.

I was under the impression that the correct price to sell a product for is the price which gets you the highest profit.
You're conflating Intel's interest with the public interest. Some people at Intel may be made better off by this plan, but the detriment to the consumer is larger. Unless you work for them: don't be so apologetic about other people taking money out of your pocket.

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Re: Intel wants to charge $50 to use your CPU fully

Postby phlip » Mon Sep 20, 2010 5:57 am UTC

Goplat wrote:You're conflating Intel's interest with the public interest.

No I'm not, I'm just finding it really hard to condemn them for acting in their own interest, in the same way as every other company in the history of ever.

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Re: Intel wants to charge $50 to use your CPU fully

Postby Zamfir » Mon Sep 20, 2010 6:10 am UTC

Goplat, you are ignoring that most costs of cpus are fixed, like r&d and new factories. If they only sold the best-performing version of the CPU at the profit margin of the lowest performance, they would not recoup their initial investment. They would have to charge more than the price of the current cheapest model, although less than the current price of the full performance model.

In that situation, the people who want a simple cheap CPU would be worse, because they have to buy a more expensive CPU for performance they do not need. Of course, people who want a high performance CPU would be better off, because the mass market would be subsidizing the high-end.

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Re: Intel wants to charge $50 to use your CPU fully

Postby PhoenixEnigma » Mon Sep 20, 2010 6:11 am UTC

Xeio wrote:
PhoenixEnigma wrote:One seller makes two chips - one powerful, one less so. The low-power one they sell for $X, the high-power one they sell for $X+15.
Another seller makes one chip of equal power to the first seller's high-power chip, but locked down to perform equally to the other seller's low-power chip. They then sell this for $X and a one-use unlocking tool for $50.

It's basically a ploy to charge $X+50 for a product worth (and sold by Intel for!) $X+15.
Except that's a really poor analogy, because then everyone (who wants the higher performance) buys the first seller's chip for $X+15 rather than $X+50 (unless of course they'd rather pay X now, and unlock it at some nebulous point in the future when they need it, but that's unrelated). The only way this doesn't happen is if you have some sort of restriction (say, for example, an OEM that only offers one or the other) or deception by the second seller (which would generally be illegal).

And this still doesn't account for the fact that they already sell the same chips at different speeds. See: i7 920/930, or any other numerous examples

Except that's exactly what Intel is doing. I'll eat my hat if the new Pentium G6951 isn't the existing Pentium G6950, except that it can be unlocked with this procedure. Guess what happens if you take a G6950, and add 1MB of L3 cache and enable HyperThreading? You get a Core i3-530*. You're right - logically, anyone who ever wants the faster CPU is much better just buying it. That's what worries me - Intel thinks this will work, when logic says it shouldn't, and the only ways I can see them making it actually work are rather underhanded.

There's a difference between what Intel is doing here, and part binning like they do with, for example, the i7-9xx CPUs. Part binning is selling the same physical chip, with some, more expensive ones guaranteed to work faster than other cheaper ones, often because of manufacturing variance. That makes senses - some of the i7-920 CPUs, for example, are/were just i7-965**s or whatever that couldn't run at the higher clock speed, but were still good enough to sell at a useful speed. You could get lucky, of course, and get one that would run at the faster speed, but if it didn't, it's not like you could return it.

This upgrade code, though, is Intel guarantying that the CPUs will run at full speed, 100% of the time, if you'll just hand over the money. They're selling something guaranteed to perform the same (actually, slightly worse), and charging more for it in one case. As you pointed out, it doesn't make sense for consumers to do that without an external, and probably ethically questionable, force involved.


*Actually, not even that - the i3-530 still has a small clock speed advantage, but there is no i3-520.
**The i7s are a terrible example, of course, since pretty much all of them could be overclocked like no tomorrow anyways. AMD's heavily harvested and binned CPUs would be a better example, or many of nVidia's GPUs.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Zamfir » Mon Sep 20, 2010 6:26 am UTC

Phoenix, what about people who think the cheap version is good enough, but have a small doubt that they might regret it later on? The upgrade option might tempt them to buy a cheap Intel instead of a cheap AMD.

Perhaps the 50 bucks is too much to work that way, but Intel can experiment with the price. It's easier to drop to a lower upgrade price than to raise the upgrade price in the future. Count on a price drop soon.

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Re: Intel wants to charge $50 to use your CPU fully

Postby Kyrn » Mon Sep 20, 2010 9:29 am UTC

Alternatively, it might be the price which they consider taking responsibility for. They take responsibility for unclocked systems, but if you want it to be clocked higher, pay $50 more and they'll take responsibility too.

(granted I don't think that's really the case)
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Re: Intel wants to charge $50 to use your CPU fully

Postby Gelsamel » Mon Sep 20, 2010 9:40 am UTC

Actually the two hypothetical chips wouldn't be indentical, since one has lock/unlockability and the other doesn't. Wouldn't manufacturing that feature into the chip/software whatever add up to an extra cost that has to be passed onto the buyer? The locked chip of same speed as the non-locked chip will be more expensive simply because it can be upgraded.

If it was the same price as the non-locked chip and the same speed then they would be losing profit on any locked chips that were never upgraded, to make up the profit margin they'd have to increase the base price.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Zamfir » Mon Sep 20, 2010 9:53 am UTC

Gelsamel wrote:Actually the two hypothetical chips wouldn't be indentical, since one has lock/unlockability and the other doesn't. Wouldn't manufacturing that feature into the chip/software whatever add up to an extra cost that has to be passed onto the buyer?

No,no,no! The whole point behind such strategies is that making different chips is much more expensive than making a single design, even if that single design has loads of features extra. If you want chips with and without the upgrade feature, you make all chips with the feature, and disable it on some of them.

The same goes for other features, like extra cache, or more cores, or higher clock speed. You make the design with the most cores, highest speed and most cache that you can still expect to make at a decent yield. Then you cripple some of them to make budget products.* It's cheaper than building multiple factory lines. Of course, for a while you still have your old factory lines, and you can use those for budget lines too.

* An extra benefit is that some failed chips of the line can still work as cripples, if the failure is in in the right place

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Re: Intel wants to charge $50 to use your CPU fully

Postby Gelsamel » Mon Sep 20, 2010 10:04 am UTC

Consider the difference between top of the line CPUs and budget CPUs.

Just from here; http://www.newegg.com/Store/Category.as ... Processors

72.99-999.999USD is the price range. You really think that it would be better to make just a single chip for this range of prices? Manufacture the 999.99USD chips and just sell em locked for 72.99USD and make money? Hell, in the end what this really means is that they'll have one EXTRA manufacturing line for their OEM stuff because who is going to buy locked chips for custom made computers? That will just cost them more (another price that'll pass onto the consumer OEM and otherwise).
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Re: Intel wants to charge $50 to use your CPU fully

Postby SlyReaper » Mon Sep 20, 2010 10:22 am UTC

Gelsamel wrote:Consider the difference between top of the line CPUs and budget CPUs.

Just from here; http://www.newegg.com/Store/Category.as ... Processors

72.99-999.999USD is the price range. You really think that it would be better to make just a single chip for this range of prices? Manufacture the 999.99USD chips and just sell em locked for 72.99USD and make money?


By my understanding, that's exactly what happens. They try to make the most high-powered chips possible in a given production line, but due to inevitable manufacturing errors, some will not function to that specification, so they downclock it, lower the multiplier, raise the VID, disable areas of cache, sometimes even disable cores, and then sell these chips at a lower price. The ones which turn out perfectly will be sold as high end chips.

In fact, they'll do this even if the chip being gimped would work at higher specifications. This is because if all they sold were high end chips, they wouldn't shift too many of them. And this works out well for clever people who know how to reactivate disabled cores and overclock to the specifications of more expensive chips.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Zamfir » Mon Sep 20, 2010 10:45 am UTC

Sure, they do not run 1 single line for everything, but they do run as little lines as possible.

The $999 is somewhat misleading. Intel's most expensive chips are usually from their server range, they wouldn't set up such a high-end production line just for the consumer market. You can at this moment recognize those by the LGA1366 socket.

The other chips on that page are all either Clarkdale, the new dual-core design, or Lynnfield, the slightly older quad-core design. Even some cheaper Celerons that are only sold to OEMs are Clarkdales. The variation within those lines is mostly done by disabling features.

So, yes, there is $329 Clarkdale i5-680 on that page, and there exists a Clarkdale Celeron G1101 for perhaps $50. Those are the same design and might come from the same line. You can find some processors from older lines still for sale, but usually those are no longer in production.

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Re: Intel wants to charge $50 to use your CPU fully

Postby Gelsamel » Mon Sep 20, 2010 10:55 am UTC

SlyReaper wrote:
Gelsamel wrote:Consider the difference between top of the line CPUs and budget CPUs.

Just from here; http://www.newegg.com/Store/Category.as ... Processors

72.99-999.999USD is the price range. You really think that it would be better to make just a single chip for this range of prices? Manufacture the 999.99USD chips and just sell em locked for 72.99USD and make money?


By my understanding, that's exactly what happens. They try to make the most high-powered chips possible in a given production line, but due to inevitable manufacturing errors, some will not function to that specification, so they downclock it, lower the multiplier, raise the VID, disable areas of cache, sometimes even disable cores, and then sell these chips at a lower price. The ones which turn out perfectly will be sold as high end chips.


So CPU factories are like RPG crafting systems?

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Re: Intel wants to charge $50 to use your CPU fully

Postby Tirian » Mon Sep 20, 2010 11:05 am UTC

phlip wrote:I was under the impression that the correct price to sell a product for is the price which gets you the highest profit. Not the lowest possible amount that you can bear. The cost of manufacture doesn't directly affect that value, though it does indirectly by changing the profit calculation. So if people are willing to pay $X for something, you'd be silly to sell it for less than $X, even if you'd still make a profit at the lower amount (and would have a more efficient market at that price).


Unreasonable profit margins is a business practice that I condemn wherever I experience it, whether it is in breakfast cereal or concert tickets or mattresses or now evidently computer chips. I can buy into the notion that you can charge what the market will bear, but in general capitalism would have that someone could set up shop next to me and try to steal my business by undercutting my price. Now, if it turns out that Intel is willing to compete fairly and openly for the $50 service of unshackling the chip, then I'll be more satisfied with their business model.

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Re: Intel wants to charge $50 to use your CPU fully

Postby Zamfir » Mon Sep 20, 2010 11:18 am UTC

Tirian wrote:Unreasonable profit margins is a business practice that I condemn wherever I experience it, whether it is in breakfast cereal or concert tickets or mattresses or now evidently computer chips. I can buy into the notion that you can charge what the market will bear, but in general capitalism would have that someone could set up shop next to me and try to steal my business by undercutting my price. Now, if it turns out that Intel is willing to compete fairly and openly for the $50 service of unshackling the chip, then I'll be more satisfied with their business model.


There can't be anything like perfect competition in the CPU market. The fixed cost of development is so high that you can't just set up shop and produce something similar. If there is too much competition in the market, profit margins will fall so low that no one can recoup their investment, and some competitors will disappear again. You can see a similar phenomenon in the large aircraft business.

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Re: Intel wants to charge $50 to use your CPU fully

Postby Obby » Mon Sep 20, 2010 11:26 am UTC

Gelsamel wrote:
SlyReaper wrote:
Gelsamel wrote:Consider the difference between top of the line CPUs and budget CPUs.

Just from here; http://www.newegg.com/Store/Category.as ... Processors

72.99-999.999USD is the price range. You really think that it would be better to make just a single chip for this range of prices? Manufacture the 999.99USD chips and just sell em locked for 72.99USD and make money?


By my understanding, that's exactly what happens. They try to make the most high-powered chips possible in a given production line, but due to inevitable manufacturing errors, some will not function to that specification, so they downclock it, lower the multiplier, raise the VID, disable areas of cache, sometimes even disable cores, and then sell these chips at a lower price. The ones which turn out perfectly will be sold as high end chips.


So CPU factories are like RPG crafting systems?

"Yes, I rolled a 20; +3 Speedy CPU of MultiThreading GET!"


While it's not quite like that... yes. Variances in manufacturing result in variances in performance. For example, let's say most i7, i5 and i3 chips are made from the same line. Some are produced to be the best chips in the line (the i7's), some of them are purposefully produced to meet lower specifications (AKA the lower price points of the i5 and i3), and some will have defects. The defective ones may still be useful, so they lock off the parts of the chip that aren't guaranteed to work properly, and sell it at a lower price. That's what the advertised speed of a CPU is: the speed at which it is guaranteed to operate properly. Most chips are able to be overclocked, but the factory does not guarantee that they will work properly, and price accordingly.

That's where the difference is. They are taking perfectly useful chips that CAN be guaranteed to operate at a higher level, but purposefully downgrading them and then charging extra to "unlock" them even though they already sell a better chip than the unlocked one for less than the initial + upgrade cost. Hence all the $X+15 and $X+50 stuff.
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Re: Intel wants to charge $50 to use your CPU fully

Postby GoC » Mon Sep 20, 2010 11:35 am UTC

Bright Shadows wrote:
Internetmeme wrote:If I get this chip, I'm not paying $50to use it. I bought it, and I can use it however I want. I'm sure others will feel the same. Because it's software that unlocks it, I'm sure either a hack will be released or the software pirated. It's just not right that Intel can do this. It'd be like releasing an air conditioner, but then requiring you give extra money to be able to cool your house below 80 degrees.

If you get this chip, you are paying for a piece of hardware with all the restrictions the manufacturer has placed on it. If you buy it and then complain, it is in effect like buying a screwdriver and complaining that it is not a wrench. If you want a wrench (ie an unlocked piece of hardware) then buy one, don't whine about the screwdriver.

If I want to turn it into a wrench I have a goddamn right to turn it into a wrench if I know how.
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Re: Intel wants to charge $50 to use your CPU fully

Postby Gelsamel » Mon Sep 20, 2010 11:37 am UTC

Still that means they're taking gaurenteed i7s (and gaurenteed high priced CPU) and turning them into i5s and selling them for i5 prices despite being able to sell them for i7 prices. Downgrading somewhat defective chips to a level to make them reliable is one thing, but every guarenteed perfect chip that you downgrade seems to be a loss in profit to me (as you aren't gaurenteed that 100% of those downgraded chips will be paid to upgrade, especially with piracy so wide spread).
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Re: Intel wants to charge $50 to use your CPU fully

Postby SlyReaper » Mon Sep 20, 2010 11:46 am UTC

Gelsamel wrote:Still that means they're taking gaurenteed i7s (and gaurenteed high priced CPU) and turning them into i5s and selling them for i5 prices despite being able to sell them for i7 prices. Downgrading somewhat defective chips to a level to make them reliable is one thing, but every guarenteed perfect chip that you downgrade seems to be a loss in profit to me (as you aren't gaurenteed that 100% of those downgraded chips will be paid to upgrade, especially with piracy so wide spread).


Not really. If they had loads of i7 chips and not many i5 chips, all the i5s would sell out quickly, and a lot of i7s would just sit on the shelves. So they downgrade them and sell them as i5s. This increases sales (because they're cheaper), thus profit. The manufacturing cost of an individual chip is so negligible compared to the retail cost that they can afford to do this with impunity.
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