True CPU Processing Speed based on Clock Speed

You can't compare them directly. Intel and AMD chips use completely different architecture.

Different generations of Intel or AMD chips also use different architecture. (ie. 45nm 3.0GHz E8400 is much faster than the 3.0GHz 65nm E6850)

it's like asking why a lambo gets beaten by a ferrari when they both have 500hp. it's really about the internal differences of the two.

that's why there are benchmarks!

Good point and also the answer to this question.
To the OP. Figure out which apps you will use the most and select the CPU that gives you the best value. You'll find that AMD wins in some (dollar for dollar) and loses in some benchmarks. Generally speaking, performance for dollar and vice versa, AMD wins.

Phenom II X4 965 at 3.4ghz provides 80% of the processing speed at only 20% of the cost of an i7-975 Extreme Edition at 3.33ghz

This would appear to be a valid basis for comparing the relative merits of the two CPUs

No, it is not valid. The i7-975 is a premiere, high-end product. A product that couldn't be beaten by anything that their competitor could bring out.

Also AMD has been forced to sell the PII 965 at such a price because even the I7-920 would beat it in most occassions. In truth if the PII 965 could compete with the I7-975, AMD would inflate the price nearer that.


Again, going to car analogy, if Ferrari made a super racing street-legal model that couldn't be beaten by anything that Lamborghini could dish out, then why must Ferrari be content on selling it at the same price as the competition?This is a perfect chance for profit!

80%?

Not really. If you look at raw processing power, the 965 BE has more like 66% of the processing power of the 975 EE at 20% the cost (this is assuming both CPUs are used to their fullest, all threads loaded). Also, this is an invalid comparison, since the 975 is unmatched in performance. This allows Intel to charge much more for the CPU, since to some people, it is worth the extra cost for the fastest, despite the much poorer performance per dollar.

For a better comparison, take a processor closer to the same price range. For example, the i7-860 provides around 120% of the processing power of a Phenom II 965 BE, at roughly 140% the cost. The i5-750 provides roughly 100% the performance for 100% the cost (of course, all of these performance numbers are application dependent).

A Lamborghini is about twice as fast as a Toyota Camry. Does that mean the it should cost twice as much as the Camry?  

Actually it costs around 7x more  

That was the point.

So you're saying Intel is being ridiculous with their $500 and $900 CPUs?

YES. If you search through the forums, nobody would recommend the i7 950 or i7 975 unless the OP has an insane amount of cash, has maxed out every other piece of equipment, and wouldn't dare overclock.

Intel has quite a monopoly on the high-end segment of computer processors today, nothing could come close from the competition so why sell it cheap? From a financial point of view, it does work.

Assume it costs intel $100 to produce one i7 chip (regardless of the clock speed), then sell the top two models at $500 and $900, instead of the $200 the i7-920 is going for. That's already a 5~9x profit for basically producing one product!

I'm saying the same thing also. Of course I'd like to use those high end CPU but just can't afford them and even if I could I'd probably get AMD's best.

The top end CPUs could be a good choice for overclocking too. They are higher-binned parts, and will tend to overclock higher than an average i7-920.