For several years, chipmaker Intel (INTC +2.59%) has talked about 3D Xpoint, a new memory technology that it helped develop. 3D XPoint promises substantial performance enhancements over traditional NAND flash memory, which should make it suitable for customers looking for extremely fast storage drives.
Intel's memory business is centered first and foremost around its data center ambitions. Most of the NAND flash-based solid-state drives that it sells go into data centers, and it's highly likely that the same will hold true for drives based on its 3D XPoint technology.
Image source: Intel.
Nevertheless, Intel does sell premium-priced solid-state drives into the very high end of the consumer market. Indeed, the company just released its first 3D XPoint-based storage drive for that market known as the Optane SSD 900P, and early signs suggest that it may be a hit with performance-sensitive consumers.
Out of stock
The first Optane SSD 900P drives come in two storage capacities: 280GB and 480GB. The drives retail for $389.99 and $599.99, respectively.
These drives are certainly far more expensive than the high-end NAND flash-based solid-state drives aimed at the same market. For example, the 512GB configuration of the Samsung (NASDAQOTH: SSNLF) 960 Pro NAND flash drive -- widely considered the fastest consumer-grade NAND flash-based consumer drive available today -- sells for just $310.
Put another way, the 480GB Optane SSD 900P costs around $1.25 per GB, while the 512GB Samsung 960 Pro costs just under $0.61 per GB.
Nevertheless, despite the ultra-high price tag of the Optane SSD 900P compared to the Samsung 960 Pro -- though I'll admit that I thought they'd be more expensive -- there's evidence to suggest that quite a few are willing to pay the premium for better performance: Both configurations of the Optane SSD 900P are sold out on Newegg.com, a popular reseller of computer components.
Is it a supply issue?
Of course, when a product sells out, all we know is that demand exceeded supply. Without knowing what kind of supply Intel provided to retail partners like Newegg.com, it's too soon to tell for sure if this product is going to be a big success in its target market.
Nevertheless, I wouldn't be surprised if it proved to be.
Remember that right now, the market for enthusiast and gaming-oriented products continues to grow. Intel has indicated on numerous earnings conference calls that sales of its higher-end gaming-oriented processors continue to grow.
In addition, graphics specialist NVIDIA (NVDA 0.87%), which sells graphics cards to gamers and PC enthusiasts, continues to see significant growth in its gaming graphics chip business. The graphics specialist has seen both increases in unit shipments as well as an increase in the average selling prices of its gaming-oriented graphics cards, further suggesting that the PC enthusiasts are increasingly shifting their purchases to higher-end product.
I think it's clear that the market for products targeted explicitly at gamers and PC enthusiasts is booming, and I think AnandTech reviewer Billy Tallis summed things up perfectly in his assessment of the Optane SSD 900P's chances in this market.
"The price of the Intel Optane SSD 900P is accessible enough that many enthusiasts will pay the premium to have the bragging rights of the fastest [solid-state drive] money can buy," the reviewer said .
Now, I wouldn't be surprised to learn that 3D XPoint, particularly since it's a new technology, isn't easy to manufacture. On top of that, I suspect that Intel will prioritize shipments of 3D XPoint technology into the data center market, where it can generate higher profit margins for largely the same basic technology.
That said, I think Intel will ultimately make good money from selling the Optane SSD 900P into the PC enthusiast market.
