The commercial implications of Core i7

by Scott Bicheno on 4 November 2008, 11:30

Tags: Intel (NASDAQ:INTC), AMD (NYSE:AMD)

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Good news for the channel

The other more unconditional benefit for the channel from the Core i7 launch is how it will drive the market for component and system upgrades.

Core i7 is bigger than Core 2 and requires a different chipset (X58) so if end-users want to upgrade to core i7 they'll have to get a new motherboard too. Furthermore it uses DDR3 memory so in most cases that'll have to be upgraded too.

There have already been a number of X58 motherboard and DDR3 memory for Core i7 launches and, on the face of it, an entry price of $284 seems to promise making joining the Core i7 party affordable for a decent proportion of consumers.

Or so it might seem... once you factor in the substantially higher cost of mainboards, based upon Intel's new X58 chipset, that will support Core i7, plus also the latest DDR3 system RAM, then, presently, it seems likely a significant price premium will be attached to joining the party; though we're confident that the usual suspects within the upper elements of the market will still think this is a price worth paying.

The good news for AMD and NVIDIA is that these same usual suspects are hardly going to tolerate mediocre discrete graphics on their new Core i7 system. So we can expect a round of graphics card upgrades as Core i7 systems proliferate too.

Couple that with the likelihood of people choosing this time to upgrade other components and peripherals, or buy a whole new system, as well as the initiation of a new workstation refresh cycle, and the launch of Core i7 should generally be good news for the computer hardware channel. It couldn't have come at a better time.

 

 



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Indirectly, however, it allows Intel to cut the prices of its older products yet further and put even more price pressure on AMD.
I don't think it's anything to do with being allowed, certainly not by i7 - Intel could have cut the price of the now older products any time they liked - it's just that there was no need to so they might as well keep a better profit margin.

The smartest thing Intel have done, which I'm not sure you mention in the article, is delay the mainstream nehalem products a year. Essentially the current mainstream products (now core 2) are still more than good enough to compete with AMD and the delay gives them market space to operate in, while allowing Intel to only release with a more efficient/cheaper manufacturing process.