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I understand it seems weird with hardware, but I think it's similar to how we charge for software. Try this thought experiment: 1. Based on market analysis, I
by nilsbunger 8y ago
I understand it seems weird with hardware, but I think it's similar to how we charge for software.
Try this thought experiment:
1. Based on market analysis, Intel decides it could sell a part with hyperthreading for $1K, and one without for $500.
2. Engineers start building both chips.
3. Because the chips themselves cost little to make ($45 and $50 for non-HT vs HT let's say?), and it costs $10M of engineering time to design each chip, engineers realize it would actually be far more efficient to design one chip with hyperthreading, and disable it for the lower-end SKU.
I'm curious which part you object to in this sequence. The sale price of chips is mostly amortizing very high R&D costs, not unit distribution costs. There are a variety of different types of customers to serve with different price points, while designing different chips is expensive, so it ends up being logical to make one chip with different features enabled.
Software and web services are the ultimate expression of this kind of economics. It costs almost 0 to serve an additional customer, but a lot of R&D and operations to build it.
Would you call a web service "intentionally damaged" when they don't give you all features for the same price (or for free?)
- p1necone 8y agoThis market where they can build chips for $50 and sell them for $1000 only exists because there is a (near) duopoly on x86 (afaik mostly due to patents). If the HT chip costs almost the same as the non HT chip then maybe they should just be selling HT chips for $500 instead, that would probably be what would happen if there was actually competition in the x86 market.