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Intel wants to charge $50 to unlock stuff your CPU can already do
- adbge 16y agoHow does this business model even make sense? I just can't wrap my head around why you would produce a product, cripple it, and then sell it. Edit: My point is that Intel is intentionally reducing the value of their product. How can they afford to do that and remain competitive?
- xenophanes 16y agoSo you don't have to produce lots of different products? Mass producing the same good version is cheap.
- gaius 16y agoIt's like region locked DVD players. It's all the same kit off the same assembly line, just with one jumper lead attached. If you're Sony or whoever you want to be able to shift your inventory from country to country if that's where the demand is.
- caf 16y agoIt's not even a physical jumper, most DVD players can be switched region by means of codes sent to the IR port.
- chunkbot 16y agoThe _business model_ makes sense, because the sale of these unlocks are practically all profit, and thus they can sell at multiple price points. It's just not right in a moral sense to prey on uneducated consumers like this.
- ergo98 16y agoHow is this preying on uneducated consumers? If I bought a netbook that had an Atom 450 in it, and I knew what the processor was and what it was capable of, and then I took delivery and found out later that it really is an Atom 450+ that can morph into a Xeon 7500 with a payment, there's no loss or detriment to me to not take the option. If anything it's a convenience.
- matwood 16y agoActually you bring up a good point where it's much better for the consumer because mobiles are so hard to upgrade. Joe consumer can buy the cheap laptop today and then pay an upgrade fee later to simply bump the processor up without having to buy a whole new machine. Sounds like a good deal for him.
- patio11 16y agoPrice differentiation between customer groups. It is not different conceptually from my downloadable software, which is free or $30 depending on whether you want a code which activates an if statement in the bitwise identical executable. I could charge people $5 for the download and $25 for the code. Not a great idea, I think, but straightforward.
- wmf 16y agoIt's a form of damaged goods price discrimination. People who would not have bought the full-price processor will buy the crippled version. http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination http://www.economics-ejournal.org/economics/journalarticles/2007-1 http://www.economics-ejournal.org/economics/journalarticles/...
- rbanffy 16y agoIBM mainframes have been doing it for decades. In their market, it makes sense. You buy a cheap mainframe and, when the time to upgrade comes, the hardware upgrade consists of a phone call. Now... Would you have to run a Windows program in order to "upgrade" the CPU? I kind of like the idea of writable logic inside the CPU.
- rythie 16y agoMost of the cost of the chip is in the R&D just like in software so the cheap chips cost about the same as the expensive ones on manufacture. For years, people have been overclocking cheap chips to make them run like the top end ones which shows there is little difference between them. Therefore price differentiation comes into to play so they can maximise their profit. It's similar to what Microsoft do with the different editions of Windows.
- adamtj 16y agoAny good business seeks to extract the maximum amount people are willing to pay. A single price for all buyers works against that. (I forget the economics term for it.) It's why coupons and discounts for senior citizens exist. Senior citizens and people willing to spend time clipping coupons often can't afford to pay regular prices, so businesses offer discounts where they still make a profit. Some profit is better than none. I'm sure Intel would love to produce high-end chips for people willing to pay, and low end chips for others. But, the cost of designing and building two separate but similar products would probably be much higher than simply crippling high-end chips. The alternative is that they only produce high-end (or low-end) chips and normal prices, driving low-end (high-end) customers to competitors, or they lower their high-end price and try to make up the difference in volume. It does seem a little dirty to sell something to somebody, but restrict how they can use it. But, Intel isn't just selling a chunk of silicon. They are selling the work that went into shaping that silicon just so. They could have designed it much more cheaply if it didn't need to do so much. So, by buying the low-end chip, you aren't paying them for the extra effort they put in for their high-end customers. If you want the extra benefit, then you must pay for the extra work.
- edanm 16y agoPlease, read this article by Joel Spolsky on (software) pricing: http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html http://www.joelonsoftware.com/articles/CamelsandRubberDuckie... Amazingly informative, taught me a lot about how pricing works in the real world.
- prodigal_erik 16y agoIn a well-functioning market every vendor would be frantically scrambling to improve value minus cost, because the delta between the two is the upper bound on their profit. But being in a market with very few competitors and ridiculously high barriers to entry gives Intel the luxury of incurring minor costs to decrease the value they offer, without seeing anyone immediately undercut them on it. If you could run a chip fab in your garage, you wouldn't see price discrimination ploys succeeding.
- zokier 16y agoI think it works like this: Intel develops a CPU and looks at the market and sees that their chips is competitive at $150 price point. So they go and sell it at that price. But the production costs of a CPU is probably closer to $10. And because there is a market of people who do not want to pay $150 for a CPU, Intel cripples some features of the CPU and sells it for $100. This way those who are willing to pay more will pay more, and those who are not pay less.
- gaius 16y agoThis is quite normal in high-end kit; If you buy an HP SuperDome for example with half the CPUs they'll probably actually ship you a fully loaded one with half the chips turned off (still for the price of exactly what you ordered). Then when you want to upgrade you don't have to take any downtime, you just pay them the difference and they supply you with the codes to unlock it. IBM do this with mainframes all the time. First time I've seen this on consumer kit tho'.
- _delirium 16y agoIt seems a little clearer in that case, because mainframe purchases are often pretty explicitly "licenses" rather than "purchases", with an actual contract negotiated between the two companies. IBM used to even come and take back the machine if you stopped paying the annual fees, because you didn't really own it. Consumer hardware is more typically a "sale", though, with no real contract-negotiation phase, and both parties' obligations completed after the sale, except for any warranties.
- gkoberger 16y agoDon't get me wrong- I get why people are mad. It comes off as racketeering. And I certainly wouldn't want to drop $50 on this. But how is this all that different from software companies that do the same thing? Your basic subscription to Basecamp, your Photoshop trial, your Windows 7 Home Edition, the Keynote trial that comes with your Mac, your iPhone... they're all capable of doing a lot more (for no extra cost to the company behind it), and you can upgrade for a cost. Another good example that the article mentions is upgrades in video games. This is a pretty common practice for software, so why not hardware?
- chopsueyar 16y agoBecause you own the physical hardware, not simply a "license" to use the hardware. Unless processors are coming with EULAs now? This could set a dangerous precedent for automobiles or any other physical good. EDIT: I'm speaking of consumer, not business purchases.
- wmf 16y agoIf you buy a crippled processor and hack it, I'd guess that Intel has no cause to sue you, precisely because you own that processor. But they don't have to make it easy to hack.
- noarchy 16y agoUntil Intel distributes a EULA with the processor. If the courts will hold up the validity of a software EULA, why not one that applies to hardware? ...not that I think that this is an agreeable situation. But I am hardly surprised to see things evolve in that direction.
- JBiserkov 16y ago>Until Intel distributes a EULA with the processor. ... written with a very tiny font in silicon.
- ergo98 16y ago
- shirtless_coder 16y ago1-2 months tops before someone breaks their security.
- seltzered 16y agowell, that risk is exactly why they're testing the idea out in low-end markets first - so the people who would break the security for this probably don't even care for this laptop anyways.
- wmf 16y agoYou don't have to scratch your own itch. An entrepreneurial hacker could start selling "$50 value" unlocks for, say, $25.
- jdietrich 16y agoLast time I checked, that would constitute illegal circumvention under the DMCA.
- wmf 16y agoYeah, don't try this in the USA. Fortunately it's just software, so you can sell it from anywhere as long as the USA doesn't block your advertising or payment processing.
- brazzy 16y agoDid you actually check at all? http://www.law.cornell.edu/uscode/html/uscode17/usc_sec_17_00000102----000-.html http://www.law.cornell.edu/uscode/html/uscode17/usc_sec_17_0... Doesn't look to me like it covers CPU features.
- jerf 16y agoThey'd probably argue you're circumventing the copyright protections on the portion of the chip you didn't pay to access, just as circumventing DRM for pre-installed DLC for a game would be a DMCA violation. Anybody's guess what the courts would say about that, that is to say, I'm not saying I agree with this argument, just that I think it would be good enough to get someone selling $25 unlocks into court with a decent chance of serious losses.
- jdietrich 16y agoThis is how the industry has always worked. The 486SX was a 486DX with the FPU burned off with a laser. Initially this was to make use of parts with a defective FPU, but parts with perfectly good FPUs were often disabled to fulfil demand. CPUs are produced to a single design within a processor series. The ones with no faults are clocked the fastest and have all their features enabled. Parts with lots of flaws are sold off as crippled budget processors. AMD's triple-core processors seem a bit strange until you realise that they're a quad-core part with one faulty core. Overclockers have known about this for years, identifying countless 'good batches' of processors and GPUs that were perfectly capable of being clocked faster, but were sold as cheap parts to fulfil demand. If this seems like a con, then the whole IC fabrication industry is a con - artificially crippling ICs has been standard practice for decades.
- reitzensteinm 16y agoFrom a technical perspective, you're absolutely correct. This is just the logical next step in what's been going on for 20 years. But from a consumer's perspective, this is a big shift. It's taking what was once an open secret in the industry and shoving it right in the faces of consumers. And I wouldn't underestimate the backlash that can come from something like that.
- jhancock 16y agoIts still nothing new. IBM was doing this with mainframes in the '70s. The mainframes they installed typically had more horsepower than your were licensed for. When you needed more power, the IBM rep came over with an impressive suitcase of equipment, locked himself inside your server room and simply flipped a switch and then ran some diagnostics for an hour or so to further the illusion.
- _delirium 16y agoIBM didn't even pretend that that they "sold" you the mainframes, though; they were explicitly rented.
- 16y ago
- zitterbewegung 16y agoCouldn't someone theoretically figure out how to enable these features without paying intel? I suspect if intel starts doing this people are going to figure out ways around this.
- dedward 16y agoPractically guaranteed someone will, in no time flat, figure out how to unlock these, and that knowledge will be spread far and wide. There will be a run on the stores for the cheap versions of the chips for this reason, mostly for the home/small shop busines, and then Intel won't do it anymore.
- kule 16y agoThis seems like a great idea to me - sell the slower processor cheaply to the customer with the promise that they can upgrade it later via a simple code with no hardware changes necessary. The customer can get a performance boost later down the line when they have the need/money for it. Intel gets the opportunity to make a little more money and the customer has a little future proofing - like I said seems like a great idea to me....
- anigbrowl 16y agoI ♥ AMD when it comes to pricing. Their pricing ratios seem to reflect the realities of production yields rather than market segmentation, and seem more closely correlated with performance. (Desktops; haven't looked at server CPUs lately).
- rbanffy 16y agoWhat worries me more is that if software can enable parts of a chip, software could, also, cripple the processor by enabling conflicting parts.
- dedward 16y agoIIRC, intel chips have had software modifiable microcode (or some portion thereof) that could render them useless for a good 10 years or more.
- chbarts 16y agoHow long will it be before this software is cracked and Intel has to think harder about this stuff? Also: IBM did the same kind of thing beginning in the 1960s with System/360 and System/370 mainframes, but I think there may have generally been hardware modifications involved.
- jjcm 16y agoWe already do this in several industries, so it's nothing to get that upset about. However my larger worry here is that the end-users will now think that software can upgrade their hardware. That alone opens up huge doors in security - users will inadvertently download some tracking program that claims to "upgrade their processor" under the assumption that it does the same thing that intel is doing. Good for computer repair companies and spyware companies, bad for the end user.
- wmf 16y agoYou're about 15 years late; IIRC there was malware that claimed to upgrade your modem to 56k and your CD-ROM drive to a CD-R drive.
- strebler 16y agoFunny related sidenote: the Chinese government was at one point so paranoid about buying processors from western companies that they initiated the creation of their own CPU architecture and began fabrication. They had a fear that outside CPUs could be programmed to be disabled (either remotely or under certain scenarios). In any case, the processors were reportedly quite bad and the whole thing was eventually dropped.
- nivertech 16y agoTwo more examples: * Nvidia intentionally capping floating point precision on 1/8th on their GTX 480 cards, since they cost a fraction of their Tesla cards. Both based on latest Fermi architecture. * In automotive industry: two otherwise identical cars, but with different versions of engine microcontroller driver, can have many thousands of dollars difference in price.
- heimidal 16y agoIt seems most of the commenters here are overestimating the average consumer. Excluding the friends I have in the tech industry, not a single one of my friends or family would be able to tell you the different between the CPU and software on their computer. Besides, which is a better value proposition to the consumer (even if it is not a better value in reality)? Paying $50 for an online CPU upgrade that makes their processor appear 10% faster, or dropping $500+ on a brand new computer to get 40% faster?
- bobds 16y agoMy question is, how do you unlock/lock things on the processor via software? Does the CPU have a special instruction that the software triggers? I can't wrap my mind around it.
- tbrownaw 16y agoI would guess it uses some of these: http://en.wikipedia.org/wiki/Model-specific_register http://en.wikipedia.org/wiki/Model-specific_register
- pmjordan 16y agoThis actually sounds pretty good to me, at least in theory. Upgrading the CPU is quite costly - you have to take out the old CPU and replace it altogether with a new one. With HDDs you can put the old one in an external enclosure and get some use from it (if the reason you're replacing it isn't failure), and with RAM you might have slots free, so you can keep using the old stuff in addition to the new. Replaced CPUs tend to be pretty useless. The socket type changes all the time, so you have to eBay it off. Laptops are worse, the CPUs are often soldered on or you can't find replacements. The only real problem I foresee is that the upgrades are likely going to be of limited use. Hyperthreading gives you a modest boost, anything more than that (clock speed, disabled cores, cache) will drive up power consumption and therefore thermal dissipation. Computers upgradeable in this way will have to contain cooling systems that can cope with the extra heat, even if 90% of people will never upgrade. Might still be feasible for the very low end (Atoms - especially as they're so slow even "normal" people might upgrade) or as CPUs become increasingly modular (either double your CPU or GPU cores in the same package, but not both).
- tzury 16y agoWell, if it was SAAS (software as a service), no one would have complain about that, right? With every paid service, one can get a list of features for a fixed price, and then pay more to "unlock" features that that very software can already do. I wonder why is it easier for people to pay extra for extra in software but not in hardware. Does anyone have an idea?
- seanos 16y agoThis already happens with cars. For example, the difference between the BMW Mini One and Cooper versions is basically just a different engine map on the CPU, with the former restricted in power and the latter sold at a higher price http://www.newmini.org/content/mini_jan02.htm http://www.newmini.org/content/mini_jan02.htm.
- dchest 16y agoThis seem to happen with mice [animals] too: Deleting a certain gene in mice can make them smarter by unlocking a mysterious region of the brain considered to be relatively inflexible, scientists at Emory University School of Medicine have found. http://www.medicaldaily.com/news/20100918/2064/gene-limits-learning-and-memory-in-mice.htm http://www.medicaldaily.com/news/20100918/2064/gene-limits-l...
- dchest 16y agoCan't wait to go to The Pirate Bay for upgrades to my hardware.
- jacquesm 16y agoDEC used to do this with their hardware, they would cripple an otherwise perfectly functional machine to a cheaper model in order to segment the market. Of course DEC field engineers did not feel like waiting for the diagnostics to complete so they usually temporarily upgraded the machine to full spec to run their tools, then revert the changes before they left. This was a funny little dance because some of their customers had clued in to the trick and would do the same thing after the engineers have left, upgrading the machine, only to downgrade it just before a field engineer would arrive. On the plus side, if this is a software thing I fully expect it to be hacked.
- robk 16y agoIntel has been doing this for years with 100% flawless chips. Crippling a chip is part of their business. Their yield management is fantastic such that they run entire wafers at the higher spec then choose what % to sell as lower-end SKUs purely based on demand. Perhaps 10 years ago this was driven by yield quality, but nowadays the number of chips out of a batch that can't pass the test for the top-of-the-line product in that batch are < 1%.
- rdl 16y agoIBM and Sun Microsystems (one of the first workstation vendors, then seller of servers, especially to finance; now an obscure division of Oracle, a commercial database company) used to do something similar with their biggest machines -- ship a fully populated high-end server, and then sell activation of CPU and memory resources after the fact. I don't know how this was enforced; I think it was mainly done at the OS or firmware level, not at the CPU level.