Published in Processors

Intel’s official price list is fiction

by on18 December 2017


All to make shareholders feel good

Chipzilla’s official price list is a document which is designed to help shareholders feel good about themselves and not really much else.

Motley Fool, which generally supports Intel, had a quick look at the differences between Intel’s official price list and what Chipzilla actually charges.

For example, Intel's processor price list says that the company asks $161 for a chip known as the Pentium N4200, which is based on the company's low-cost Apollo Lake architecture. This is an ultra low end processor intended for, effectively, bottom-of-the-barrel notebook computers. So the fact Intel charges $161 means that it is super confident that it can sell with a huge margin.

While you expect a bit of a reduction between Intel and the OEMS, it would appear that the value of these chips is hugely inflated in the official price list.
But the reality is that the chip really costs somewhere in the ballpark of $30 to $50 in the kinds of quantities that any serious PC vendor is going to want to buy.

“Intel's processor price list, then, is not much more than a mirage”, moaned Motley.

In 2016, Intel reported that its client computing group (CCG) platform revenue - this revenue essentially includes PC processors and, when applicable, required support chips known as platform controller hubs (PCH) - was approximately $32.9 billion.

If we assume that Intel had roughly 90 percent worldwide PC processor unit share, then using market research firm IDC's estimate of worldwide PC shipments in 2016 of 260 million units, Intel's PC platform average selling price comes out to around $126.

Last modified on 18 December 2017
Rate this item
(0 votes)

Read more about: