The new AMD Ryzen processor is already here and Intel is probably not too happy about the numbers so far. Neither the performance nor the price of these processors. Now, what can Intel do to try to weather the storm that is coming? As a brand, the blue company has never been particularly known for making big price cuts on their products in the past, even when it’s products in the market perform worse than the competition.
For example many years ago, back in the time when AMD introduced its Athlon 64 processor with the ClawHammer core (PGA 754 socket). Intel at that time had on the market its Prescott processors (or “Pres-hot” as they used to call those miniature stoves). Those were around the dawn of the Internet and the only way to be informed was to read computer magazines, but this was only done by the biggest computer geeks (like yours truly). Most preferred to go to a store and order a computer, which almost always came with a Prescott stove processor inside (and then in the summer came the problems of excessive noise, heat and random reboots).
The Prescott has always been, since its launch, a rather mediocre processor that yielded considerably less than its cost suggested. Even so, it continued to sell very well despite the fact that both the Athon 64 and its successor, the X2, performed considerably better, something that could be verified referring web pages like Anandtech and Tom’s Hardware. And Intel did not even have the slightest intention of lowering prices. After all, thing were going pretty well for them by having consumers uninformed and getting succulent (and illegal, as was later revealed) agreements with leading global OEMs to promote and sell their processors almost exclusively. When the first processors with Core architecture arrived the tables turned for both companies. Intel became complacent, pulling out new processors every year with really ridiculous (or in some cases, non-existent) increases in performance between generations but still charging good money for these. AMD’s adventure with the Bulldozer architecture never worked from the beginning, so for the blue team, this was the icing on the cake.
But times have changed. The computer consumer is generally better informed than 14 years ago and does not buy PC magazines, instead it looks for information on the Internet. Users search and contrast between many sites (something that is much more practical and cheap than having to buy many magazines) and is able to make better informed decisions than in the past. And the news about Ryzen are quite disheartening for Intel, who I am more than convinced that did not expect a 52% increase in performance over its previous architecture. An increase that in most cases puts these processors above or even in performance with the highest range of Intel processors while having with significantly lower prices.
What does all this mean for the blue brand? That it has now entered Damage Control mode and it’ll have to work hard for its processors to continue to sell fairly well (it is clear that the way they’re doing things right now won’t do) and the best way to do this is to make quite substantial cuts in the price of their processors so that consumers will consider again purchasing them. Will they? In my opinion, they will be forced to do so by the circumstances, given that the Core architecture practically won’t yield much more (even if some are waiting for Cannon Lake, without realizing that by then, Zen+ will already exist) and they can only minimize blood loss while waiting for a completely new architecture to start again.
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