Monday, April 7, 2008

Only Intel Marketing Can Sell At 1500% Margins

How many businesses can sell chips at 1500% margins?? I bet you won't believe to buy processors at that price even if you were in Zimbabwe's inflation... But that doesn't stop Intel to sell its upcoming Atom processors at those margins, if you were to believe TGDaily. TGDaily noted earlier that Intel produces these  small processors at $8 including packaging and shipping. And according to the latest pricelist, Intel hopes to sell these at $135!!

Atom is the upcoming generation of low-power processors meant for MID (Mobile Internet Devices) that come in really small packages. I noted earlier about how much noise Atom has been generating even though its not the best performing part out there. But according to Anand, it seems Atom is some special change in architecture that's gonna change the future of computing. May be Anand's seen that 'Crystal Ball' of the future, but it still got me wondering about the hype and the pricelist just added up to the hype.

The price list is as seen below:

- Atom Z500, 800 MHz clock speed, 512 KB L2 cache, FSB400, 0.65 watt TDP, $45 (including chipset)
- Atom Z510, 1.1 GHz, 512 KB, FSB400, 2 watt, $45 (including chipset)
- Atom Z520, 1.33 GHz, 512 KB, FSB533, Hyper-threading, 2 watt, $65 (including chipset)
- Atom Z530, 1.60 GHz, 512 KB, FSB533, Hyper-threading, 2 watt, $95 (including chipset)
- Atom Z540, 1.86 GHz, 512 KB, FSB533, Hyper-threading, 2.4 watt, $160 (including chipset)

Hyper-threading is back and just like James Reinders had told me to expect it in every upcoming Intel chip, it isn't really a surprise. Technologically, there are quite a few new things in Atom, but claiming all of them to be path-breaking doesn't make good sense. Its more like bringing the original Pentium back to a new fabrication and adding some lessons learnt from Pentium M. I think any ARM design without much dramatic changes would easily be able to beat Atom today. And if we had Intel giving x86 licenses away, then we would really have an 'apple vs apple' comparison (pun intended!!)... But I'll talk about the architecture some other day...

Is Intel Playing Bully Again ??

You must be thinking Intel has gone crazy with the pricing on this one, but there is some logic behind it. And the logic is called Intel marketing... Intel has been known to sell processors that are not the best performing in the market at higher street price during 'NetBurst' era. AMD alleges that Intel sold its processors at lower prices to PC vendors on the condition that they would sell Intel-only machines. It had major market share then, and I don't think it will be any different now!! If you go by the same logic, probably that margin is only for the lame buyer and not for Intel buddies.

1 comment:

Ajay said...

Atom is really a chip in the new direction. Its low powered and still has AMD marketing behind it. Just comparing it to netburst and its definitely a good thing that Intel is moving towards low temp and low power