Why an expensive Celeron?

Archived from groups: comp.sys.ibm.pc.hardware.chips,comp.sys.intel (More info?)

I was reading through this article about Intel deciding to implement
64-bit on their Celerons:

InformationWeek > Microprocessors > Intel Plans 64-Bit Celeron Push >
April 1, 2005
http://informationweek.com/story/showArticle.jhtml%3Bjsessionid=MZ5VCRDPIGZSIQSNDBCSKHSCJUMEKJVN?articleID=160403375

What struck me about this was that these "Celerons" they're talking
about cost as much as some Pentium 4's and Athlon 64's, upto $700. Why
bother selling them if they cost that much? It's either going to cut
into Pentium sales, or the Pentiums are going to cut into these Celeron
sales. But then it occurred to me, that if they cost as much as Pentiums
anyways, what difference does it make? It wouldn't make a difference to
Intel if it sold Pentiums or Celerons, both would be the same margin. So
this leads to the question, why is Intel doing this? If it comes out
with a Celeron that has the same features and costs the same as a
Pentium, where does the differentiation come from?

I think the answer is that Intel has given up its well crafted
decade-old market differentiation strategy, of value-priced processors
(Celerons) and performance processors (Pentiums). Why has it given up
this strategy? Because AMD was using it's own strategy against it for
the past year. AMD had firmly hurded the entire Intel line into a
mid-range category, fenced in all sides by AMD processors. At the
bottom, Sempron not only competed against Celerons, but also low end
Pentiums. At the other end of the market, the top-end Pentiums were only
good enough to compete against the low-end Athlon 64's. It must've been
very embarrassing for Intel that its Pentiums were sometimes competing
against Semprons which are only supposed to compete against Celerons. So
this must be the reason it decided to create an expensive Celeron -- it
wants to give some of it back to AMD, now it can say Athlon 64's can be
compared against Celerons too which would be embarrassing to AMD.

We might now be leaving the era of well-differentiated product lines.
There may not be any longer any difference between Celerons and Pentiums
in either features or price, from this point forward.

Yousuf Khan
3 answers Last reply
More about expensive celeron
  1. Archived from groups: comp.sys.ibm.pc.hardware.chips,comp.sys.intel (More info?)

    Yousuf Khan wrote:
    > I was reading through this article about Intel deciding to implement
    > 64-bit on their Celerons:
    >
    > InformationWeek > Microprocessors > Intel Plans 64-Bit Celeron Push >
    > April 1, 2005
    > http://informationweek.com/story/showArticle.jhtml%3Bjsessionid=MZ5VCRDPIGZSIQSNDBCSKHSCJUMEKJVN?articleID=160403375
    >
    >
    > What struck me about this was that these "Celerons" they're talking
    > about cost as much as some Pentium 4's and Athlon 64's, upto $700. Why
    > bother selling them if they cost that much?

    I think you need to pay more attention to the date and it's significance
    in this culture. I have heard in the past Celerons will also be 64b
    capable, but I have not heard any price change for adding this
    capability to either Pentium or Celeron lines. All the Celerons out
    there are $100 or less and I'm sure it's going to stay that way.

    Alex
  2. Archived from groups: comp.sys.ibm.pc.hardware.chips,comp.sys.intel (More info?)

    Alex Johnson wrote:
    > Yousuf Khan wrote:
    >> What struck me about this was that these "Celerons" they're talking
    >> about cost as much as some Pentium 4's and Athlon 64's, upto $700. Why
    >> bother selling them if they cost that much?
    >
    >
    > I think you need to pay more attention to the date and it's significance
    > in this culture. I have heard in the past Celerons will also be 64b
    > capable, but I have not heard any price change for adding this
    > capability to either Pentium or Celeron lines. All the Celerons out
    > there are $100 or less and I'm sure it's going to stay that way.

    Well, if it was an April 1st prank, there were no obvious clues that it
    was a joke. For example, no talk about revolutionary new tachyon
    technologies that add to the price of these chips or anything like that.

    Yousuf Khan
  3. Archived from groups: comp.sys.ibm.pc.hardware.chips,comp.sys.intel (More info?)

    On Thu, 07 Apr 2005 17:20:10 -0400, Yousuf Khan <bbbl67@ezrs.com>
    wrote:

    >I was reading through this article about Intel deciding to implement
    >64-bit on their Celerons:
    >
    >InformationWeek > Microprocessors > Intel Plans 64-Bit Celeron Push >
    >April 1, 2005
    >http://informationweek.com/story/showArticle.jhtml%3Bjsessionid=MZ5VCRDPIGZSIQSNDBCSKHSCJUMEKJVN?articleID=160403375
    >
    >What struck me about this was that these "Celerons" they're talking
    >about cost as much as some Pentium 4's and Athlon 64's, upto $700. Why
    >bother selling them if they cost that much? It's either going to cut
    <snip>

    The only thing I can think of is that somewhere in there they are
    confusing SYSTEM pricing for PROCESSOR pricing. Typical Celeron
    systems sell for between $350 and $800, depending on the options (when
    buying from the likes of Dell and HPaq). The prices they list for new
    64-bit Celerons would seem to fit into this mold reasonably well.

    Of course, this doesn't explain how they go on to quote processor
    pricing for AMD's Athlon64 and Athlon64 FX chips, but a certain degree
    of incompetence would be pretty much standard-fair for this sort of
    publication.

    -------------
    Tony Hill
    hilla <underscore> 20 <at> yahoo <dot> ca
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