> Does this excuse Intel’s form of market segmentation? No. They almost certainly disable, for example, hyperthreading on cores that support it - just for the segmentation.
I think even this is a bit unfair. Intel's segmentation is definitely still overkill, but it's worth bearing in mind that the cost of the product is not just the marginal cost of the materials and labour.
Most of the cost (especially for intel) is going to be upfront costs like R&D on the chip design, and the chip foundry process. I don't think it's unreasonable for Intel to be able to sell an artificially gimped processor at a lower price, because the price came out of thin air in the first place.
The point at which this breaks is when Intel doesn't have any real competition and uses segmentation as a way to raise prices on higher end chips rather than as a way to create cheaper SKUs.
> The point at which this breaks is when Intel doesn't have any real competition and uses segmentation as a way to raise prices on higher end chips rather than as a way to create cheaper SKUs.
I’m not sure that this is really fair to call broken. This sort of fine granularity market segmentation allows Intel to maximize revenue by selling at every point along the demand curve, getting a computer into each customer’s hands that meets their needs at a price that they are willing to pay. Higher prices on the high end enables lower prices on the low end. If Intel chose to split the difference and sell a small number of standard SKUs in the middle of the price range, it would benefit those at the high end and harm those at the low end. Obviously people here on HN have a particular bias on this tradeoff, but it’s important to keep things in perspective. Fusing off features on lower-priced SKUs allows those SKUs to be sold at that price point at all. If those SKUs cannibalized demand for their higher tier SKUs, they would just have to be dropped from the market.
Obviously Intel is not a charity, and they’re not doing this for public benefit, but that doesn’t mean it doesn’t have a public benefit. Enabling sellers to sell products at the prices that people are willing/able to pay is good for market efficiency, since it since otherwise vendors have to refuse some less profitable but still profitable sales.
It is unfortunate though that this has led to ECC support being excluded from consumer devices.
Without knowing what the silicon lottery distribution actually looks like we can't really say that.
> "... but it's worth bearing in mind that the cost of the product is not just the marginal cost of the materials and labour."
Yes, you could choose to amortize it over every product but then you're selling each CPU for the same price no matter which functional units happen to be defective on a given part.
Since that's not a great strategy (who wants to pay the same for a 12 core part as a 4 core part because the amount of sand that went into it is the same?) you then begin to assign more value to the parts with more function, do you not? And then this turns into a gradient. And eventually, you charge very little for the parts that only reception PCs require, and a lot more for the ones that perform much better.
Once you get to diminishing returns there's going to be a demographic you can charge vastly more for that last 1% juice, because either they want to flex or at their scale it matters.
Pretty soon once you get to the end of the thought exercise it starts to look an awful lot like Intel's line-up.
I think what folks don't realize is even now, Intel 10nm fully functional yields are ~50%. That means the other half of those parts, if we're lucky, can be tested and carved up to lower bins.
Even within the "good" 50% certain parts are going to be able to perform much better than others.
I think even this is a bit unfair. Intel's segmentation is definitely still overkill, but it's worth bearing in mind that the cost of the product is not just the marginal cost of the materials and labour.
Most of the cost (especially for intel) is going to be upfront costs like R&D on the chip design, and the chip foundry process. I don't think it's unreasonable for Intel to be able to sell an artificially gimped processor at a lower price, because the price came out of thin air in the first place.
The point at which this breaks is when Intel doesn't have any real competition and uses segmentation as a way to raise prices on higher end chips rather than as a way to create cheaper SKUs.