Here’s How Intel Corp. Should Price Its Upcoming High-End Desktop Chips

Image credit: Intel. 

Earlier this year, BenchLife.info leaked Intel's (INTC 1.77%) upcoming high-end desktop processor model lineup known as Broadwell-E. The family of processors will include two six-core chips, an eight-core part, and a 10-core part at the very top.

There has been considerable discussion and debate across various Internet forums as to how Intel will price these new chips. In this article I'd like to discuss at what price points I believe Intel will try to sell these chips.

Here's how Intel is pricing its current processor lineup
Intel's current high-end desktop lineup currently includes three processor models; I've included the model numbers (as well as some basic tech specs) and Intel's suggested retail pricing in the table below.

Source: Intel ARK database.

It's our job, then, to try to "fill in the blanks" with respect to pricing in the following table, which includes the upcoming Broadwell-E chips:

Source: BenchLife.info.

Expect the 6950X and 6800K to mirror the prior generation price points
Note that the 6950X is the only model among the four Broadwell-E chips with the "X" designation, implying it is the only "Extreme Edition" part in the lineup. Intel has traditionally priced its "Extreme Edition" parts at $999, and I see no reason for the company to change things up here.

I also think Intel will keep the lowest-tier model priced at $389. The model number, 6800K, implies it is a higher-end part than the quad-core mainstream Skylake processor (model number 6700K). It would be strange to see the 6800K at price parity (or at a discount) to the 6700K (MSRP of $350), so keeping it at the $389 price point that the 5820K occupies makes sense.

Puzzling out the 6850K and the 6900K
Making educated guesses about where Intel will price the 6800K and the 6950X is the "easy" part; the hard part is to try to determine what the company will price the 6850K and the 6900K at.

The main difference between the 6800K and the 6850K will be some clock speed at factory settings and likely PCI Express lanes (I suspect the 6800K will feature 28 and the 6850K will come with a full 40). With the Haswell-E generation, Intel charged a full $194 extra for the 5930K in exchange for what essentially amounted to 12 extra PCI Express lanes. Not exactly a compelling value.

My guess is Intel is releasing four Broadwell-E models rather than five in a bid to "fill in the gap" that existed between the $583 chip and the $389 chip.

To that end, I believe Intel will price the 6900K at the same price point the 5930K currently sits at ($583). From there, it would make sense for Intel to price the 6850K somewhere between the 6800K and the 6900K. Taking the average of $583 and $389 yields a price of $486.

Based on this analysis, I feel comfortable filling in the Broadwell-E table that I introduced earlier in the article:

Source: BenchLife.info; author estimates. *Denotes author estimate/guess, not official Intel information.

Here's why this pricing scheme works
In my mind, a good pricing scheme requires the following two conditions to be met:

• At each price point, the user "feels" as though she or he is getting a good value; and
• The user should feel that if he or she can afford to move a tier up, it actually makes sense from a long-term total cost of ownership perspective to do so.

Paying nearly $200 extra dollars for 12 PCIe lanes and a little more clock speed (as Intel asks customers to do in choosing the 5930K over the 5820K) seems ridiculous; I personally wouldn't recommend the 5930K over the 5820K to buyers unless they absolutely needed the full 40 PCI Express lanes but didn't want to pay up for the 5960X.

However, in the above pricing scheme, the premium for the 12 extra lanes is closer to $100. That's still a hefty premium, but I suspect the kinds of people who would make use of those extra lanes (i.e., customers running two graphics cards simultaneously, perhaps with an NVMe solid-state drive as well) would feel comfortable with it.

Then, for just another $100 over the six-core 6850K, the customer can get two additional, fast CPU cores. There is a solid argument to be made about the longevity the two extra CPU cores bring, particularly as games and other CPU-intensive applications increasingly make use of them.

Finally, although the price-to-performance ratio of the 6950X in this scenario drops substantially from what the 6900K brings (25% more cores, 71% higher cost), "the best" always comes at a premium.

We'll see what Intel prices these chips at when they launch in the second quarter of 2016.