E3s are basically i7s with different binning, e.g. there are E3s without the IGP ; so if an i7 part has yield issues with the IGP, it can be disabled, binned as

E3s are basically i7s with different binning, e.g. there are E3s without the IGP ; so if an i7 part has yield issues with the IGP, it can be disabled, binned as a Xeon E3 and sold more cheaply than the equivalent i7. 2P/4P multi-cpu is the other major feature of Xeon which only appears in E5/E7.