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Intel wants to Charge Customers Additional Fees to 'Unlock' Processor features.

Intel wants to Charge Customers Additional Fees to 'Unlock' Processor features.

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.


Caught this article here. Apparently, a particular interpretation of the DMCA makes this legal.  This, in my opinion, is the DLC slipery slope that we're now on.  I've bought the Processor - I paid for it legally - I gave them my hard earnt money for the item in the box.  If it has "additional features" that are already in the damn thing, which means the company already paid for them and as such is included in the boxed manufacturing mark-up price, why are they locked at all?  Raping your customers appears to be catching on.

I'd like to personally thank Paid Downloadable Content for this development.  Why not have TV's that include 'clearer picture tech' unlockable for an additional $100.00, or Cars that have better brakes that can be activated for a mere $150.00 additional, and Movies at the Cinema that can be viewed in glorious Widescreen - granting nearly a full 2 thirds of additional film! - for a mere $10.00 more.

107,870 views 51 replies
Reply #26 Top

Intel has been doing this for years.  Way back when, the 486 DX chip was a better performing chip (and more expensive) than the SX.  It also cost less to manufacture the DX since to produce the SX, they had to actually modify the DX.

Reply #27 Top

Quoting Firbolg, reply 22
This is bad because it stifles progress and is only possible due to the partial monopoly Intel has. We put up with the bad aspects of a market economy like boom/bust cycles, inequality, and constantly struggling to survive in exchange for the benefits it provides. Those benefits basically boil down to us constantly getting better and cheaper stuff as time goes on. What Intel is doing violates the purpose of a free market. They are selling both speed X and speed Y chips that have the same manufacturing cost.

Binning is different and reasonable story. If the yield on your high end product is not 100% then it makes perfect sense to sell the downgraded rejects at a lower price point. The key difference here is that as a company you're still striving for the best high end product and you want your yield on that product to be as high as possible. It's also different than what Intel is discussing as in order for their scheme to work they need 100% of their chips to be able to operate at top speed.

None of this would be remotely possible if there was more competition in the processor market. Intel would use any advantage they have to out perform or undercut their competitors, leading to more progress and lower prices for consumers. Instead they can essentially sandbag progress and charge a premium due to their monopoly (or dominant partner in a duopoly) position.

 

Well, what about the Lynnfield CPUs? The i7-860 and i5-750 are the same CPU. Same design, same manufacture, everything. The i5 just has Hyperthreading turned off, and a slightly lower clock rate (but they seem to overclock just fine, so it's not a binning issue).

The only innovation here is that in the past they've done it with microcode or hardware modifications, and now they can sell a software tool to unlock the CPU and upgrade it. Trying to reach different price points has always been the goal of manufacturers, it's not a bad thing so long as the products are still competitively priced and perform well.

 

Reply #28 Top

I'd wager they're doing this because they're getting better yields on the high-end chips than they expected. They've got to mark down sufficient quantities to supply the lower-grade chips either way, so this gives them an opportunity to get a bit more out of those sales.

As others have said, CPU/GPU manufacturers have been doing this for a while (marking down chips with minor defects, or even perfectly good ones if they need to meet low-end quotas). It used to be that you could enable many such disabled functions by soldering an open bridge, etc.

It does seem like something that'll irritate buyers, though (Pay only $X to uncripple your purchase!), and no doubt it'll be circumvented eventually.

Reply #29 Top

If they were smart, they'd stop leaving their prices jacked up so high and return to the process of dropping them shortly after release.  Then they could catch back up to AMD in the bargain market.

Reply #30 Top

Quoting Tridus, reply 27

Well, what about the Lynnfield CPUs? The i7-860 and i5-750 are the same CPU. Same design, same manufacture, everything. The i5 just has Hyperthreading turned off, and a slightly lower clock rate (but they seem to overclock just fine, so it's not a binning issue).
They seem to, and the vast majority probably do. But Intel needs >99.9% working rate on new chips for a given speed that they're sold at. They're (or Nvidia or AMD) going to play it safe and bin even marginal chips, which is why overclocking even works to begin with. Virtually all of the parts at a given bin level are operating at below capacity so that all of them are guaranteed to work.


The only innovation here is that in the past they've done it with microcode or hardware modifications, and now they can sell a software tool to unlock the CPU and upgrade it. Trying to reach different price points has always been the goal of manufacturers, it's not a bad thing so long as the products are still competitively priced and perform well.
 
I think binning not because of technical reasons but solely to create artificial price points is basically the same thing. It smells a little less since it's not quite so blatantly obvious but it's still is a result of not enough competition and in the long run stifles innovation.

And don't get me wrong, I'm not saying it's not a logical or correct business move on the part of Intel, only that it's bad for progress and consumers.

Reply #31 Top

Quoting psychoak, reply 29
If they were smart, they'd stop leaving their prices jacked up so high and return to the process of dropping them shortly after release.  Then they could catch back up to AMD in the bargain market.

[sarcasm]Yes, because Intel is obviously incompetent from a marketing standpoint...[/sarcasm]

Sorry, but I am sure they are a dozen steps ahead of you or any of us chiming in on this thread.

Reply #32 Top

I don't think they care about AMD.  I mean really... has AMD had a profitable quarter yet?  AMD bleeds money every year and is only still alive because people keep propping it up.  I wish they were better off (competition = good) but I really don't think intel is worried about them in any market.

Reply #33 Top

Buying unlock codes for DLC that's already on the disc seems annoying but it's actually good since it saves you bandwidth.

 

This is very clever by Intel since they can now sell an I5 and you can upgrade it to an i7. I'll just get back to AMD but average Joe will probably pay up.

Reply #34 Top

has AMD had a profitable quarter yet?

They have been profitable all year actually

Reply #35 Top

Sorry, but I am sure they are a dozen steps ahead of you or any of us chiming in on this thread.

 

Intel has twenty times the operating capital their rival does, yet can't make bargain processor sales.  The 920 is so rare that the price has gone up a good 40% since release, the 960 sits in stock all over the place.  They keep making bigger desktop processors, but almost no one needs them enough to pay the premium.

 

Publicly held corporations are typically the exact opposite of a dozen steps ahead, short term profitability will lose them market share over the long run.  There isn't even a comparison between the two performance wise, if they'd just lose the brand premium on their modern architecture they'd put AMD out of business.

Reply #36 Top

kryo is right on the money. There isn't anything new about selling chips with functionality locked. All the cool kids do it, both in the gpu and cpu markets. What is new is offering an official path to go about unlocking that functionality.

I don't see the problem.

Reply #37 Top

As strange as this sounds, it's actually a more honest approach...

Reply #38 Top

Quoting SwerydAss, reply 34

has AMD had a profitable quarter yet?
They have been profitable all year actually

How much of the profit was due to the anti-trust money from Intel?

Reply #39 Top

Quoting Dr, reply 38



Quoting SwerydAss,
reply 34

has AMD had a profitable quarter yet?
They have been profitable all year actually


How much of the profit was due to the anti-trust money from Intel?

What difference would that make? AMD has several competitive products out right now.

Reply #42 Top

Quoting Nesrie, reply 39

Quoting Dr Guy, reply 38


Quoting SwerydAss,
reply 34

has AMD had a profitable quarter yet?
They have been profitable all year actually


How much of the profit was due to the anti-trust money from Intel?

What difference would that make? AMD has several competitive products out right now.

I am not making a value judgment on the settlement.  But the statement was made they just NOW started earning a profit.  So my question is - did it come from their product or the courts?  It makes a great deal of difference as to whether they can remain a viable alternative to Intel.

Reply #43 Top

It might be a good idea to go AMD, at least until they follow suit.

And then the only option would be to go Mac, until they follow suit.

Mac is INTEL based now... :'(

This stopped chip development about 4 years ago...

Reply #44 Top

Could people please stop calling it slippery slope? It's not a slippery slope. It's a cavernous fall into blackness.

Slippery slope implies something potentially good going bad, slowly sliding downwards.

This is a plummet. It started as a plummet and it's still plummeting.

There's nothing slippery nor slope-y about it.

Reply #45 Top

Quoting vashtyphoon, reply 43
Mac is INTEL based now...

This stopped chip development about 4 years ago...

Apple never was in chip development.  They were using Motorola chips, and Motorola just was not investing enough in R&D for the Apple people.

If AMD goes, the chips are going to get a lot more expensive and innovation is going to suffer since Intel will be the only real dog in the lot.

Reply #46 Top

If Intel did become truly the only horse in the desktop/laptop processor market, with an ensuing drop in innovation and rise in prices, then I could see the ARMs beginning to take a chunk out of their sales. Not in the sense that people would start to use ARM processors in their desktops but in the sense that the market will shift to ARM based devices to fulfill functionality currently provided by desktops. It's already happening to some degree as certain tasks do not have scaling processor requirements but I think a pure Intel monopoly would hasten the process.

Reply #47 Top

A few months ago, I was about to write an e-mail to IBM and ask them if they couldn't get into the CPU desktop market and compete with Intel so the CPU desktop market goes into a Dark Age.

 

But really people, start buying AMD!     AMD Phenom II X4 965 Black Edition is strong with an unlocked multiplier. With a good CPU cooler you can clock it to like 4Ghz and defeat Intel Core i7!

Reply #48 Top

With a good CPU cooler you can clock the i7 to 4Ghz too...

 

There's nothing wrong with being the bargain processor, but they are the bargain processor.

Reply #49 Top

Quoting Thoumsin, reply 12
Not really a bad idea from Intel... both them and customer can have some benefice from it...

Let see a usual situation... a processor with 2 core at 20$, a other with 4 core at 40$, a other with 6 core at 60$ and a other with 8 core 80$...

First, at the fabrication level, it is more expensive for Intel... yes, it is more cheap to build a lot of identical thing that a few of each different thing... method will allow huge mass production with lower price...

At the customer level... you first buy by example the 2 core... with time, software/game ask more power and you buy a new processor with 4 cores... trowing the old 2 core to trash because nobody wish it ( too slow, too old , etc )... later, time for a 6 core... and later again, the 8 core... In total, you will have spend 20+40+60+80= 200$...

Let say that Intel build a single processor with 8 core but only two enabled and sell it at 25$, and ask 25$ for each 2 cores upgrade... a rip-oof, you will say... the basic 2 core version is more expensive... but again, you are wrong... it is a little more high price for compensate the loose of income for intel... mass production compensate for one part but not all... and the customer in all this ? it is simple : 25$ for the first 2 core activated, each upgrade at 25$ : 4x25= 100$ ... yes, with full upgrade, you have spare 50% when related to the first case up...

At a other level, the system can be interesting too... ecology level... need to build only one processor, it mean that 3 processor are not trow in the nature...

A other thing who can be interesting, only pay for what you need... you encode/decode a lot of HD film, simply enable the part of the processor who speed up the process... you make a lot of high quality render, simply enable the part of the processor with a high speed hardware render engine...

In fact, it can be fully beneficial for the customer, the only danger will be for Intel... it will not be long before hacker/pirate create some piece of software who generate a key for unlock the extra feature of the processor... buy the 25$ 2 core version, torrent, generate key, unlock feature and you have the 8 core version for almost nothing... 

Except that with time, the processor get outdated quickly and thus its price. And you can trade in back your old hardware.

Take your example, after one or two years the customer decide that the 2 core is obsolete and would directly upgrade the processor to 8 core thus he will only have to pay $20 + $80 = $100. And by them the 8 core may cost only $40 thus $20 + $40 = $60. The customer may even trade in, sell the old processor for $5 so the total cost will be $55 instead of $100.

Yes this is just an example and the price may differ so to upgrade the hardware may be not so costly, however think, with your experience how long will you upgrade your processor, half a year? 2 year? By that time now technology will come out e.g. 16 core processor and making the 8 core upgrade less attractive or the 8 core become so cheap that directly buying it is more worthwhile.

 

Reply #50 Top

I don't have a problem with it on the level that I know they already bin parts that could perform so much better, I have a problem with it on a level that Intel parts are already expensive and they'll probably use it to artificially inflate the high end prices.

I'm already an AMD fan so no skin off my back.