Gadgetory

bear with me here I wrote this script while in an airport terminal the assumption I'm going to make in this video is that you've already seen the plethora of benchmarks for the Intel Core I 999 hundred K with its eight cores and sixteen threads it's definitely the new gaming king no denying that but at what cost well on paper over 500 USD actually closer to 600 right now that can easily jump to 7 or 800 USD equivalent in other countries mind you where supplies and taxes vary we'll assume though the u.s. figure for the sake of argument here so who in his or her right mind would spend $500 $600 on a hyper-threaded eight core CPU well according to Intel the same kind of people who would spend upwards of 400 USD on a hyper-threaded 6 core CPU the 8700 K was successful from the start because it held the title of gaming King and it's been that way for quite a while it was praised as such by myself and colleagues and this regard and to be completely honest I don't really have much of a problem with a vast majority of Intel's pricing structure I had never really complained too much about like core i5 pricing I did complain quite a bit about the 73 50k that was excessive and I called it outright when I saw it that most of the time Intel is pretty smart about how they price things but when it comes to the 900 K I'm a little a little flustered a little upset because I feel like that's not where the market price for that chip should be but it is and we'll explain why we'll explain why they're sold out everywhere and we'll also explain how that price in the future will affect sales right now for AMD counterparts because I'm sure AMD a little worried but I don't imagine they're too worried because the people who are already buying AMD CPUs are more value oriented and in tell us pretty much forfeited that running at this point so in a nutshell if you want a core i3 you'll pay a little over a hundred bucks for it you want a Core i5 a little over 200 i7s have traditionally been in the 3 to 350 sweet spot that's referring to the last few generations but this latest launch is a bit strange if you want Intel's most expensive consumer grade ship now you'll have to pay over 500 USD for closer to 600 again if we use the 8700 K as a bit of context its MSRP was roughly 350 at launch jumping to 500 bucks for this generation or higher which is arguably another refresh you'll need to pay 40% more for it and again for marginal improvements across the board now at this point some of you may be trying to defend intelligent think wrong with defending a company as long as it's justified correctly in my opinion well its price so much higher because this is the first eight core consumer trip they've ever released this is an exception and to that I have to counter arguments one the 8700 K was Intel's first six core consumer chip it didn't cost 500 or 600 USD and - why is it that AMD can charge so much less for honestly even many where between maybe a 10 to 15% FPS delta which most people are willing to concede when seen in the context of a $600 chip versus a $300 one to be fair we are seeing sometimes a 15 to 25 percent performance loss between the 9900 K & 2700 X that's currently AMD's best consumer grade cpu but in many games this gap narrows significantly and that's why I said 10 to 15 prior to this so why should this makes sense why shouldn't we question Intel's pricing strategy here many are upset and I believe it's justified but I don't know if we understand the full context here and that's what I want to bring to light in this video it isn't even like these CPUs require entirely new platforms right with simple BIOS updates coffee lay configured chipsets can't handle the new generation with ease power limitations aside but I am curious as to whether the power draw from an overclocked 900 K under load can be sustained without vrm throttling more testing coming soon on the channel in that arena so back to the whole pricing strategy thing what exactly is behind Intel suggested a retail price and why our inventory level is always so low at launch my theory is twofold the first is that Intel's obviously using the 40 nanometer node for both its chipsets and CPUs that short supply because you can't push all of that productivity into the CPU side of things I get it but I also think that demand is always high in the beginning and when you have a loyal fan base that demand curve tends to be inelastic meaning large changes in price won't change quantity demanded so when a conventional market when prices go up demand decreases and resulting supply increases this gap between the two lines signifies a deadweight loss or to be more exact in this case markets surplus but in an inelastic scenario the demand curve is much steeper so when we slide up and down the y-axis representing product price quantity demanded along the x-axis remains relatively unchanged brand loyalty tends to be the cause of such events that or the good in question is something that's essential which may require state and local regulation to control that's a separate issue and tell in this context however is not regulated it's my belief that they're totally aware of their own brands consumer base they know how many are loyal they know how many are locked into contracts and they know how many programs are Blue Team dependent and that's a true story there are many programs that will favor Intel Architecture over AMD architecture if you test CPUs for a living or at any point during your life I'm sure you'll realize that to some extent so maybe they play on these cues and push prices to Heights AMD could only dream of in its current state and that's the problem I have with this you see I don't necessarily blame the consumers for such a high ninety nine hundred K price despite their inelastic demand tendencies I can't really blame until either because they're doing what they want them to do and and honestly they could push more CPUs to the market I think that they could I think I think they would I should say and that's because again if you sell more you control more of the market that's been their goal all along and if Intel doesn't meet contracts at certain dates then it loses of contracts to AMD AMD gains more market share especially in the server space which is where Intel's desperately trying to keep its ground and that's a big problem for the blue team but it ultimately is good for the consumer because it means that we have a more even distribution of market share which means that prices should ultimately be more competitive that's just again a theory on paper and we'll have to see how that plays out in 2019 and 2020 so when I said on Twitter that Intel should lower its prices in order to properly compete we of course know that's not gonna happen I just wish in a perfect society that was where the prices were because I feel like that is ultimately where they should be not because of a variety of circumstances including the dual 40 nanometer node production also a fact that Intel has Intel I can pretty much charge whatever they want for something and people will still buy it because they're into loyal and you know that Intel CPUs ultimately get the job done the way they want them to and regardless of whether or not Intel artificially short supply which I think they would if they could but can't in their current state the fact of the matter is they can charge whatever they feel like charging again within reason in order to position themselves financially above the red team remember the the goal the end of the day for companies of this size is to benefit the shareholders and if you maximize margins you're going benefit the shareholders in the long run for that matter I don't even blame AMD for this I mean sure we went through an extended hiatus after piledriver and the FX lineup but we've had two solid years for the market to saturate anyone who's wanted to convert to AMD or upgrade at this point probably already has or they will when the next-gen stuff rolls out which is what we always hear but I think ultimately that whatever we have next time around is going to be justified enough by people who are on old hardware that they'll want to upgrade if they can so the point I'm trying to make here is this AMD could have chosen to release rice and chips at or slightly below comparable Intel NSR piece but instead they chose to undercut them completely introducing an entirely new fan base centered around the word value you can buy eight core rise in CPUs for as low as 180 bucks during solid online sales that in my opinion destroys even Intel's i5 offerings the traditional response would be for Intel to lower its prices too but they haven't instead they've actually gone up but why because too many systems are Intel dependent maybe too many programs favor Intel architecture and Intel chipsets too many servers use Intel CPUs until owns too much of the market share is that Intel small no not at all and you can't blame Intel for dominating the market it's a free market for the most part especially in the US and if Intel does better they deserve to get ahead in a society like this so who am i really trying to blame here well it's really no one's fault I mean the free market allowed things to get where they are today and I tend to lean on the side of the invisible hand again with some restrictions however what it entails done here is give the middle finger to those who insist on purchasing with a value minded conscience that word values almost always attributed at this point with AMD and those are good reason why so you want to buy our core I $9.99 hundred K it's the best gaming CPU on the planet maybe not by as large a margin as our pricing structure suggests but if you want it you've got to pay a premium I'll close with an opinion Intel is becoming the apple of CPUs and I fear it'll only get worse from here I must AMD do some serious recon and grabs additional market share though the free market economists in me is begging for more entrance wouldn't it be cool if we could just choose between say like 10 different CPU brands desktop CPU brands each with its own unique feature set like choosing a car sadly we don't live in that world but you gotta admit that would be pretty dope you guys like this video let me give someone a thumbs up if you disagree with me or if you agree with me I don't care if you're indifferent about this whole thing just leave a comment down below let me know where you stand on this issue if you have any additional information to add to this discussion that would also be appreciated if you want to subscribe I would appreciate it it's that red button down below you can become a member if you wanna get fancy with it and we'll catch you on the next one this is science studio thanks for learning with us