Are $1,000 Processors a Waste of Money?

[Rob Williams]

From our front-page news:

Over the course of the past few years, the processor landscape, and others, have changed drastically. Even just five years ago, people thought very little of paying $1,000 for a processor. Back in those days, we were stuck to single-core models, and models that didn't overclock to the same degree that today's processors do. When you paid $1,000 for an "Extreme" edition of those processors of the day, you actually did see a fair boost in overall performance.

The situation is much different today. The premium on a $1,000 CPU still could have made a lot of sense on the first dual-core processors, because once again, the overall performance doesn't come close to processors of today, nor did the CPUs back then overclock quite as well as they do today. But since then, things have improved dramatically, from both AMD and Intel. Not only are the architectures as a whole much better, but we have affordable quad-cores, and unbelievable overclocking-ability.

So is it worth spending $1,000 on a processor in today's day and age? In a newly-posted video interview with AMD's Pat Moorhead (ironically posted on Facebook by an Intel employee), the answer is no. According to Pat, today, there is so much value in processors, that there just isn't a need to spend $1,000 on a chip. He also notes that we're reaching a point where the GPU is just as important as the CPU, although I personally think he's thinking a little too far in the future at this point.

I'm all for GPGPU, but the selection of applications is slim, and if you are looking to take advantage of what Pat speaks about, you're going to be forced towards a certain application. But from a gaming perspective, he's right... there just isn't a major advantage of a faster CPU in most of today's games. He notes that instead of spending $1,000 on a CPU, it would make more sense to spend $250, and then use the extra on better GPUs, or on the companies latest Eyefinity technology.

My ultimate question is this. Would Pat's attitude be the same if AMD had a product capable of competing directly with Intel's Core i7's? If AMD had a top chip that could take on the i7-975, would they charge much less, or go back to how it used to be and sell their highest-end model for $1,000? What do you guys think?

Source: Pat Moorhead Interview (YouTube)​

 

[Kougar]

My ultimate question is this. Would Pat's attitude be the same if AMD had a product capable of competing directly with Intel's Core i7's? If AMD had a top chip that could take on the i7-975, would they charge much less, or go back to how it used to be and sell their highest-end model for $1,000? What do you guys think?

Intel would still be Intel... they would never turn around overnight and suddenly slash prices the next day or introduce a slew of unplanned models.

What I would expect is that if Intel ever found their CPU's in a similar situation again, they would (once again) become more aggressive in their model rollouts... rather than drop prices on a current model, they'd just bump the clockspeed higher and sell the faster chip at the original price. I can remember when every three months would result in higher Pentium/Core 2 value processor models superseding the previous models at the same price points.

 

[Doomsday]

My ultimate question is this. Would Pat's attitude be the same if AMD had a product capable of competing directly with Intel's Core i7's? If AMD had a top chip that could take on the i7-975, would they charge much less, or go back to how it used to be and sell their highest-end model for $1,000? What do you guys think?

Source: Pat Moorhead Interview (YouTube)​

those be some good questions! i think they might charge around $600 to $700!

 

[Psi*]

My ultimate question is this. Would Pat's attitude be the same if AMD had a product capable of competing directly with Intel's Core i7's? If AMD had a top chip that could take on the i7-975 ...

You hit the nail on the head with that question. Many a marketeer spin the old tune about not needing something when they themselves cannot offer it.

Actually we all do this ... offering an "reason" to others to not needing something of us when we don't know how or just don't want to do it. Like telling the wife that the yard does *not* need to be mowed *now* ... by giving a logical irrefutable undeniable reason. You never just say, "no" to a wife.

 

[gibbersome]

Shelling out $1,000 on a CPU, you bound to get burned during the next price down-cycle. It's the same as purchasing a $3,000 laptop from Dell every 4 years, vs purchasing a $1,500 laptop every 2 years. You'll be much better off and have a much better system if you choose the later option.

 

[Rob Williams]

What I would expect is that if Intel ever found their CPU's in a similar situation again, they would (once again) become more aggressive in their model rollouts... rather than drop prices on a current model, they'd just bump the clockspeed higher and sell the faster chip at the original price. I can remember when every three months would result in higher Pentium/Core 2 value processor models superseding the previous models at the same price points.

I don't see Intel ever slashing their $999 model, and to be honest, I don't see anything wrong with it. Having such a high-end model proves to the world that the company has a truly boast-worthy product. AMD could never (right now) sell a product for that high and see it sell, but Intel can. I agree that $1,000 for a CPU is something I'd never consider, but luckily there are many other models to fill every other price-range.

You hit the nail on the head with that question. Many a marketeer spin the old tune about not needing something when they themselves cannot offer it.

Well, the humorous thing is that he says a $1,000 CPU is a bad idea, but then recommends a $250 CPU and two $400 GPUs, haha. Granted, that's the exact same route I'd take if I had to spend $1,000, but still.

Shelling out $1,000 on a CPU, you bound to get burned during the next price down-cycle. It's the same as purchasing a $3,000 laptop from Dell every 4 years, vs purchasing a $1,500 laptop every 2 years.

That is a GOOD way to look at it. Unless of course you want to spend $3,000 every two years, but most people don't.

 

[Psi*]

Shelling out $1,000 on a CPU, you bound to get burned during the next price down-cycle. It's the same as purchasing a $3,000 laptop from Dell every 4 years, vs purchasing a $1,500 laptop every 2 years. You'll be much better off and have a much better system if you choose the later option.

It really depends on what the purpose is. For me, my business appears to be picking up & that translates to a lot of long (hours to days) simulation runs. And, I charge for that. It is "time is money" so I will go for maximum smoke ... meaning CPU speed.

Then there is the "retirement" of the machine. For instance, what do I do with the dual Opteron 290s on a H8DCE e/w 16 GB RAM sitting here? An i7 975 will be several times faster so that move for me is a no brainer. Haven't figured that out yet but it is nice having a box that still has some "oomph" even by today's standards.

I completely agree about laptops ... they are consumables.

 

[Kougar]

I don't see Intel ever slashing their $999 model, and to be honest, I don't see anything wrong with it.

Ah, but if you read what I said, I specifically stated Intel would never slash their prices. They only do that when releasing higher-binned models isn't an option, and only then in the sub-$100 market usually

The Pentium EE 965 was replaced with a Pentium D 960, at a lower price point. The Core 2 Extreme X6800 was eventually replaced by a Core 2 E6850 at a significantly lower price point. The Core i7 965 will soon be replaced by a Core i7 960, for half the price. That's how Intel has always worked.

Well, the humorous thing is that he says a $1,000 CPU is a bad idea, but then recommends a $250 CPU and two $400 GPUs, haha. Granted, that's the exact same route I'd take if I had to spend $1,000, but still.

I think the point was if the person was spending the money regardless... I think it's still overkill to the extreme, but at least he'd have more to show for taking a chunk out of his savings account.

 

[gibbersome]

Well, the humorous thing is that he says a $1,000 CPU is a bad idea, but then recommends a $250 CPU and two $400 GPUs, haha. Granted, that's the exact same route I'd take if I had to spend $1,000, but still.

Hah! I don't know why any gamer would need anything more than a good CPU + single GPU solution.

For example, get an i7-860 (~$270) and a ATi 5870 ($370) and you'll be able to play the most demanding games out there on high res. I don't see a need to go dual as yet.

Now if you want to take advantage of EyeFinity, wait till they work out the kinks and get another 5870 later on. You'd still only clock around $1000 mark.

Better idea would be to wait until holiday deals roll around and you can build the same system for a $100 less.

 

[Doomsday]

i be able to play Bionic COmmando and Arkham Asylum on max settings on 1920*1080 with no lagging on my yr old PC.....aaaah, i soo wish i had waited a yr..lol! never a good time aye?

 

[2Tired2Tango]

Shelling out $1,000 on a CPU, you bound to get burned during the next price down-cycle. It's the same as purchasing a $3,000 laptop from Dell every 4 years, vs purchasing a $1,500 laptop every 2 years. You'll be much better off and have a much better system if you choose the later option.

Bottom line... I got a lot better uses for $1,000 than on a CPU chip.

Heck, most of the computers I build sell for less than that, complete with monitor, printer, and mouse/keyboard.

 

[Rob Williams]

It really depends on what the purpose is. For me, my business appears to be picking up & that translates to a lot of long (hours to days) simulation runs. And, I charge for that. It is "time is money" so I will go for maximum smoke ... meaning CPU speed.

Of course, and that makes all the sense in the world. But Pat targets gamers, who don't tend to have important workloads.

Ah, but if you read what I said, I specifically stated Intel would never slash their prices.

I have to admit that I was confused by your original wording. You kept mentioning Intel but it almost sounded like you meant to say AMD. I have a clue now.

Hah! I don't know why any gamer would need anything more than a good CPU + single GPU solution.

I tend to agree, given that even mid-range GPUs can handle most of today's games at 2560x1600 with ease, some even with anti-aliasing. The CPU doesn't make a huge difference in gaming like Intel and AMD would like you to believe, but I don't expect it to always be like that.