Chip Makers Selling Fewer High-End CPUs

Lt Wuff writes "CNN has a story about how the newest/fasted/latest and greatest processors aren't selling like Intel and AMD hoped. Maybe people are wising up to the fact that you don't need the fastest processors on the market in order to open AOL..."

Why go for the newest?

[I_am_Rambi]

When you can wait a few months and get a cheaper processor, that will do the trick. Most of my friends, when building their own computers, will wait for the second or third generation chips (ie AMD 1800XP+). They can get a fast computer, for cheap.

Just take a look at Pricewatch. The Athlon XP 2200 is at $144, while the Athlon 2000 is under $100. Why would you spend that much more on a new processor, when you aren't getting alot more speed out of them.

With a few months turn over, it is worth the wait to save $50 or more on a slightly older processor, than on that latest processor.

I love when they use the Internet

[asv108]

As a reason to upgrade your computer to a 2+ GHZ machine. The funny thing is, most people don't know any better and assume that buying a new computer will make the Internet faster. The FTC needs to start coming down hard on computer companies who advertise that a new pc will make the Internet faster.

Re:Lazy Programming

[Stormie]

On a my P3-800 with 256mb of ram and a geforce 2 ti it ran like ass anytime there were more than 3 guys running around or if I was in a big room. Really pissed me off. And that was at 800x600, I had to turn it down from 1024x768 because it was unplayable.

News flash: if changing resolution improves performance, then your problem is that you're fillrate bound on the graphics card. Nothing to do with your CPU, nothing to do with "lazy/inefficient programming".

If you were getting the same crappy performance regardless of resolution, then you'd have a point.

Gaming

[Apreche]

We already determined in a previous slashdot article that gaming pushes computer tech forward. Since the minimum requirements for most games are still a 500mhz cpu with a 32MB AGP video card, nobody has a need to upgrade their pcs except for the most bleeding edge gamers, and other power users who do video encoding or AutoCAD type applications.
I remember back in the day Virtual On came out for PC and the minimum sysreq were higher than any available pc on the market, unless you had 5 grand. When the minimum amount of power required to use new software goes above the power of most people's pcs then they'll start buying faster CPUs.
Heck, even the people who are already buying faster CPUs don't buy the fastest processor available. The money:speed ratio makes it so much more worth it to buy the second or third fastest AMD, even though the fastest P4 is the best you can get.

Speed up but not performance

[woogieoogieboogie]

The clock of the processor may be faster, but overall PC performance is not. Your typical low end machine sees little difference between a 1 ghz and a 2 ghz processor, the memory and hard drive are bottle necks.

Looking at toms hardware benchmarks, http://www.tomshardware.com/cpu/02q3/020826/p4_280 0-09.html , the fastest Athlon is just over double as fast as an Athlon 850 and much of that is due to the faster FSB and ram. I am running an Athlon 1.4 ghz and there is nothing on the market which is worth upgrading to. Why upgrade for a 25 to 40% increase in performance. Ever super overclocked, none of the processors offer double the performance. If I want more real world speed, I could spend the same money on a scsi card (have one already) and a small scsi disk for windows to sit on. it's just like a car, you can only do so much with the engine, then you have to worry about the chassis, heat, and traction.

This will hurt Intel

[Groo Wanderer]

This will hurt Intel proportionalely more than AMD. The CPU game is all about Average Selling Price (ASP) across the whole line. AMD has always had thier CPUs clustered in the low range $50-$150, and has an ASP of around $80-90. Intel on the other hand, excluding the effects of $3700 large cache xeon's, has always had significalntly higher ASPs.

For every $600 P4/(latest speed grade) they sell, it can subsidise 50 $100 celerons by $10 each, bumping the ASP up a ton. They use this as a club to abuse AMD in the market, and still make good money. Since AMD can (no longer) control the high end, they can't do this, so thier ASPs suffer. The club gets even bigger when you add those xeons into the mix.

Getting back to the point, high end sales allow intel to weather competition, and down markets more than AMD. AMD's sales are clustered much more, so the bottom and the top end chips cost about the same, or at least don't have as many times the cost differential as intel's do. When top end sales go down, intel hurts a lot. AMD hurts, but much less. Losing $50/chip is much easier than $500/chip. Look for this to hit intel in the following quarters, while AMD can roll with it.

Looking ahead, when the Hammers come out, they are targeted against the Xeons. This will gut intel's margins much much more than the athlon did. Intel can sell all thier P4s at cost, and make the profit up on the xeons, they have no competition there. It will get interesting in January.

-Charlie

All good news for VIA/Cyrix

[n9fzx]

While Intel and AMD have been locked in the performance race, Cyrix took their x86 line in a different direction: low power consumption and low heat dissipation. I just built a new box based on the VIA/Cyrix Eden ITX formfactor motherboard for less than $400, and it consumes less than 36w (no fan). And, best of all, it runs everything in the ham shack -- including some powerful DSP software (PSK31).

You are smoking crack... and it shows.

[Skwirl]

Did I say anything about "creating" wealth? Ford's goal was to create an economy where he commanded as many resources as possible towards the creation of automobiles. Ford wasn't minting money, he was transferring his wealth (i.e. current profits) to the workers.

A few rich CEOs can buy maybe a dozen or so cars before the marginal utility starts to wear a little thin, but if you can persuade those CEOs to transfer enough of their wealth to their employees so that the individual employees can afford a car, then you've got utility by the boatloads.

Indeed, history shows us [state.mi.us] that other automobile employers had to follow suit and Ford's profit sharing program resulted in much cheaper cars across the board.

Granted, he also raised wages in order to prevent turnover and that heightened efficiency led to the cheaper cars. Happy workers are productive workers and, yes, they do actually pull more natural resources from the ground and produce more sprockets under the right conditions. (Note: Even if inflation is looming, the workers don't know it yet and they're still happily working harder.)

That's rather the point. If all you ever do is keep lowering employee wages until you hit the sweet spot, you'll be in a whole lot of trouble when you realize that you were on the wrong side of the labor supply and demand curve the whole time. High turnover was a warning sign to Ford that he (and the rest of his industry) were on the wrong side of the curve and they needed to raise wages. Ford undoubtably realized that one of the happy side-effects of repairing the situation was that there would be a heightened market for automobiles among the working class. Everybody wins. Ford builds his automobile empire and the working people get their cars. (Well, everyone wins except for us, the 21st century recipients of the negative environmental and social effects of car culture.)

jpmorgan, you're only correct when an industry is operating on the far side of the labor supply and demand curve. I also suspect you're not much of a Keynesian.

I suppose this all has some relevance to the recent situation. There was, afterall, a very high turnover rate amongst tech workers during the 90s who were chasing pre-IPO dreams. That sounds like (one of many) dead canaries in a mineshaft to me. (Remember: Although a few won the IPO lottery, the majority of tech workers didn't and suffered grueling hours, draconian IP contracts and vaporware products as a result. Meanwhile, corporate propaganda was telling us that the supply of workers was low when, in fact, we now find most tech workers are out of a job.)