Author: Pieter-Jan Plaisier
In light of the recent news leak by VR-Zone from which we learned the Haswell Refresh is seeing the daylight on June 2nd at Computex 2014, we reviewed the initial information from Intel regarding their upcoming enthusiast releases. Dating back one month, Intel stated it will accommodate the PC enthusiast with four different novelties:
- Haswell Refresh with improved Thermal Interface Material
- Bring Iris Pro to desktop parts
- Octo-core Haswell-E for X99
- Affordable Pentium K “Anniversary edition”
Most of the coverage on the web is, of course, dealing with the Haswell Refresh and the 8-core Haswell-E. In this article I would like to go deeper in on Intel’s approach to the enthusiast market and make an additional case for the USD $100 Pentium K edition.
When Intel switched to a K-SKU product segmentation strategy, the cost of overclocking increased drastically. Today, the minimum price for enjoying the overclocking experience is around USD $250. The strategy is very successful amongst enthusiast and mainstream overclocker groups as products targeted to these overclocker groups have been the most popular at HWBOT for the past three processor generations. On the downside, this strategy has almost completely erradicated the entry level overclocking community.
At HWBOT there are 643 overclockers who used the in 2007 released Pentium E2160. The most popular entry level processor released in 2012, the Pentium G860, only has 22 users. This means the entry level overclocking community has been reduced by 97%.
Looking at the CPU core count distribution for XTU, a software application featuring overclocking tools and a benchmark, we see that 10% of the HWBOT overclockers use a dual core CPU. That is remarkable mainly because there is no recent overclockable dual core CPU on the market, but also because the dual core overclocking group is larger than the hexa core overclocking group (despite having no products). In the Steam Hardware Survey we can also see that 50% of the gamers still use a dual core CPU.
Combining the clear interest of the community to have an overclockable and affordable processor with the historical evidence of the Entry level overclocker group as the likes of Pentium E2160, it appears there is demand and market space for this type of product.
Five groups of overclockers
As part of the research, I looked up information on the price at release for various popular overclocking processors. I then divided the enthusiast segment in five groups:
- Extreme: USD $1,000 and above, best performance no matter what cost
- Premium: around USD $500, close to best performance but price-conscious
- Enthusiast: around USD $300, targets high-end SKU of mainstream platform
- Mainstream: around USD $220, price-performance conscious
- Entry: around USD $100, wants to fiddle but has no money
The Extreme segment has a lot of money to spend and will aim for the highest performance no matter at what cost. This segment usually includes the extreme overclockers who hunt for world records. They are willing to buy an one thousand dollar CPU just to have the best performance available on the market. Target price: USD $1,000
The Premium segment is somewhat split in the middle between upper mainstream and lower extreme. They will buy highly priced components if it will provide the best performance, but are price-conscious enough to realize when they can get something similar for an equal price. Target price: USD $500.
The Enthusiast segment includes most of the mainstream users who enjoy overclocking. They have a fair amount of disposable income and are ready to cash out if necessary, but mainly look at the mainstream platform when it comes to overclocking. An extreme CPU is usually too costly. Target price: USD $300.
The Mainstream segment comes a little below the enthusiast segment. The Mainstream users want to enjoy the same features like the Enthusiasts have, but are much more price-conscious and will look at what performance per buck they will get from a specific product. Target price: USD $220.
The Entry segment includes people who have very little money to spend on hardware components but still enjoy fiddling with the settings. Historically this includes students and younger gamers. This is the group who would buy low-end components and then overclock it to the performance level of the top-of-the-line components. Target price: USD $100.
An important note is that I grouped products by target audience. For example, the mainstream overclocker only has the Core i5 4670K as choice in the Haswell line-up because that is the most affordable overclockable CPU at the moment.
Overclocker groups and CPU pricing
The chart below describes the price evolution for the CPU hardware components targeting the various overclocker groups. For the price I considered the launch price as indicated on cpu-world.com (exception: For the Core 2 Quad Q6600 we used the price for the launch of the G0 silicon revision). For each generation of architecture I looked at the choice for each enthusiast group. From top to bottom, the price varies between USD $1,059 for the most recent Extreme processors to USD $84 for the most low-end Entry processors.
Breakdown with precise release dates (click)
Here are some pointers to understand the chart,
For the Extreme user group, highlighted in grey, we see that the price has not evolved that much over time. The recent change from USD $999 to USD $1,059 may be related to cpu-world.com differentiating between OEM and boxed pricing for the last three SKUs. The OEM price of all extreme CPUs is USD $999.
For the Premium user group, highlighted in orange, we can see a price increase of 12% comparing the USD $530 Core 2 Duo E6700 from 2006 to the USD $594 Core i7 4930K from 2013. The launch of the Conroe in 2006 had higher prices in general as the performance increase was so disruptive compared to the previous generation of processors.
For the Enthusiast user group, highlighted in light blue, we see that the price increased by 30% comparing the USD $266 Core 2 Duo E6850 from 2007 to the USD $350 Core i7 4770K from 2013. Traditionally every new generation of processors get a small price bump compared to the previous generation. This is mostly likely because the new generation CPUs are always launched when the previous generation is still in stores. To differentiate pricing, the new generation is a bit more expensive.
For the Mainstream user group, highlighted in yellow, we see a fairly similar price increase of 30% comparing the 2006 USD $163 Core 2 Duo E6300 and the 2013 USD $243 Core i7 4670K. Historically speaking people who would buy in to the Mainstream processor line-ups are technology enthusiasts on a budget. Speaking from personal experience, as a student I bought the Core 2 Duo E6300 because it was the closest I could get to the performance of the top of the line Conroe SKU. The price at launch was fairly high considering my budget, but the novelty of the product and my personal interest convinced me to purchase.
For the Entry user group, highlighted in dark blue, nothing has really changed over the past decade. The CPUs cost between USD $84 and USD $91, with a small spike in 2009 at USD $113 for the Core i3 530 processor.
In general we can say that for the Mainstream and Enthusiast segment the price has increase the most. Since 2006/2007 these overclocker groups pay about 30% more for enjoying the experience of overclocking.
Overclocker groups and their favorite SKUs
To understand the dynamic between the overclockers groups better, I pulled a list of the 100 most popular CPUs at HWBOT. The popularity is measure by the amount of distinct users who submitted a result to the database using a specific CPU. The chart below represents the popularity of a CPU grouped by target audience over time.
Breakdown with precise release dates (click)
The chart is a little complex to understand, so here are some pointers,
For the CPUs launched in 2006, the most popular CPU comes from the Enthusiast group. It is the Core 2 Duo E6600 and is in the top-10 of all-time favorite overclocking processors.
For the CPUs launched in 2007, the most popular Enthusiast CPU is the Core 2 Duo E6850. That CPU is in the top-30 all-time, but was the least popular of comparing all user groups. This does not mean the CPU was not liked, but probably means the E6600 was still being used a lot in 2007.
In general, the Extreme processors are fairly well-liked by the HWBOT overclocking community. The Core i7 980X was even the most popular CPU launched in 2010! We can see two spikes for Extreme processors: one in 2007, the release of the first quad core CPUs, and one in 2010, the release of the first hexa-core CPU.
Considering the previous point, we see that since 2011 (Sandy Bridge-E) the Extreme CPUs have become rather unpopular at HWBOT. Their place has been taken by the Premium CPUs. That is very understandable since the difference between K- and X-SKU is fairly small. Performance and overclocking-wise, the USD $600 price point products are as good as their USD $1,000 counterparts.
Since 2011, the first real K-sku segmentation, it is remarkable how well Intel manages to position the Enthusiast (2600K, 3770K, 4770K) and Mainstream (2500K, 3570K, 4670K) processors. The more expensive product is more popular than the more affordable overclocking product.
The most dramatic change can be found at the Entry user group. After two years of releasing fairly popular Entry level overclockable CPUs, the price for the lowest end overclockable CPUs went up for the Core i3 530. What followed was a reduction in popularity of the Entry group processors and since 2010 no sub USD $100 CPUs are amongst the most popular overclocking CPUs.
In general we can say that ever since Intel clearly defined product positioning for the overclocking products, the market segmentation is very visible. The Enthusiast products are more popular than the Mainstream products and the Premium processors are still doing very well. It will be interesting to see if the Haswell-E with 8 cores can push up the popularity of the Extreme product group for Intel. After all, that is where the biggest margins are.
Considering the Entry overclocker group, we can say that Intel has successfully eradicated overclocking using low-cost products. Since 2010 no low-end processors is popular at HWBOT, which can simply be explained by the fact that below the Mainstream product group everything is locked. The margin of overclocking is limited to the BCLK frequency margin, which for low-end parts varies between 2 and 5% on air cooling.
Losing 97% of Entry level overclockers
The reason why Intel wanted to eradicate overclocking of the cheap parts is very simple: when overclocking, you increase the performance beyond that of a more expensive part. In their logic, overclocking means losing the up-sell margin of the more expensive part. By locking down most of the SKUs and offering the ability to overclocking on a limited (and premium priced) selection, Intel has accomplished exactly what it wanted. People who want to overclock will have to spend more.
The problem with this approach is that it excludes the user groups of people who simply don’t have much money to spend. Referring back to my personal experience with the Core 2 Duo E6300, if I were a student today I would have to buy the Core i5 4670K. That is a price difference of USD $60, which is significant enough to consider opt-out. In the case of the Core 2 Duo E6300, I opted in specifically because the new architecture presented itself as a revolution in terms of performance. Without that revolutionary performance, I may not have been the owner of the E6300.
Considering the numbers from the second graph, charting the popularity of a overclock product over time, I looked in to the absolute numbers in the Entry overclocker group. The most popular Entry group processor SKU is the Pentium E2160, released in 2007, with 643 users. In 2011, the most popular Entry group CPU was the Pentium G6950 and only had 62 users. In 2012, that decreased to even 22 for the Pentium G860. That means we lost 97% of Entry level overclockers in five years time!
The question is: where did they go? If we look at the Mainstream overclocker group, we can see an increase of 70% in users going from Core 2 Duo E6300 to Core i5 2500K. One could jump to the conclusion that the majority of the Entry overclocker group moved to the more expensive (+ USD $100) Mainstream group. But considering that the same Mainstream group grew by 143% between 2006 and 2008 going from Core 2 Duo E6300 to Core 2 Duo E8400, that might not be the right conclusion.
The hypothesis is that in 2010 the disparity between affordable overclocking and extreme/marketing overclocking was too big, causing a disruptive effect amongst low income enthusiasts. That hypothesis is backed by evidence from the second chart. Of all CPUs released in 2010, the USD $1,000 Core i7 980X was the most popular amongst the HWBOT overclocking community members. The industry – motherboard vendors in particular – focused heavily on advertising the overclocking capabilities of the mostly engineering sample CPUs. This caused the masses to believe overclocking was something only for the wealthy or well-connected.
A case for Pentium K – the unlocked dual core
The last chart I want to share with you in this editorial is one we included in an internal report about the XTU integration project. The pie chart below illustrates the distribution of processor cores as used with the XTU benchmark at HWBOT.
Above you can see the following distribution,
- 83% of the XTU users have a quad core CPU
- 6% of the XTU users have a hexa core CPU
- 10% of the XTU users have a dual core CPU
First of all I want to emphasize using of the XTU benchmark for this pie chart. XTU is a software application which combines the practicality of overclocking with the theoretical benchmarking. A user who downloads this software has access to a tool which is designed for overclocking. Also note that the benchmarking option has only been a part of XTU since the Haswell release. With this in mind, it is fairly straight-forward that most of the XTU users use a quad and hexa core CPU. Since Haswell, the only overclockable products have four and six cores. It is remarkable though how many people use XTU with a dual core CPU as there has not been an overclockable dual core CPU since Clarkdale. Looking at the 2xCPU XTU benchmark rankings, we also see that it is dominated with the non-overclockable dual core Haswell and Ivy Bridge CPUs.
This puts forward the case for an unlocked dual core CPU for future processor generations.
Combining the clear interest of the community to have an overclockable and affordable processor with the historical evidence of the Entry level overclocker group as the likes of Pentium E2160, I believe there is demand and maket space for this type of product. The Entry level overclockers of today are the big spenders of tomorrow and therefore it is important to cater to their wish for the overclocking experience within their budget range. The almost completely wiped out group of Entry level overclockers usually feature the most enthusiastic people, as they are “in it” for the passion rather than financial gain or grand media exposure. We should treasure that group and make them feel welcome in the world of overclocking again.
Bring on the Pentium K!