How Will Intel Corporation Price Broadwell-K?

Earlier this year, Intel (INTC 1.77%) revealed that it would bring to the desktop an "unlocked" (meaning the chips can be tuned to higher speeds by the user) variant of its 14-nanometer Broadwell processor paired with its high-end Iris Pro graphics. Such processors would serve as the direct successors to the prior-generation Haswell Core i5 4690K and Core i7 4790K processors.

While Intel might be expected to simply replace those two processors at their current price points, I believe the company will continue to ship the 4690K/4790K at their current price points and will position Broadwell-K Core i5 and Core i7 models at higher price points. Here's why.

More graphics plus an eDRAM cache mean higher production costs
The current Haswell-based Core i7-4790K is based on the Haswell 4 + GT2 die. In other words, it features four processor cores, but it only comes with the "GT2" class of graphics. A higher tier of graphics is available on notebook- and low-power desktop-oriented chips known as "GT3e," which feature double the graphics cores and an on-package eDRAM cache.

This higher tier of graphics means a significant increase in die space, thus increasing manufacturing costs of the main system-on-chip. Additionally, the on-package eDRAM cache is fairly large on Intel's 22-nanometer process, so that's an even bigger cost overhead.

To get a sense of how much Intel charges for the GT3e configuration over a comparable CPU with GT2 graphics, look at what the company charges for its Core i7-4710MQ and its Core i7-4850HQ mobile processors. These are identical processors from a CPU perspective, but one features the GT2 graphics and the other GT3e:

Source: Intel.

The price differential seems to be about $56 for the added graphics performance for current Haswell-based high-end laptop chips.

What this likely means for the Broadwell-K headed for desktops
Today, Intel's list tray prices (i.e., not sold in a retail box) for the Core i5-4690K and the Core i7-4790K desktop processors come out to $339 and $242, respectively. Given the price differential between the "GT3e" and "GT2" models of Haswell in the laptop space, I would expect a similar price differential between a hypothetical GT3e Broadwell-K and a GT2 Broadwell-K.

Since Intel has not signaled any plans to offer a GT2 Broadwell-K, I would assume the chipmaker intends to keep selling the 4690K and 4790K as effectively the GT2 "K" parts on the current platform. This suggests, then, that Intel might charge approximately $400 for the Core i7 Broadwell-K and about $300 for the Core i5 Broadwell-K.

What will this mean for Intel's product stack for enthusiasts?
This is where it gets a little confusing, but I'll try to explain. Intel actually has two lines of desktop processors. It has the "mainstream" processors that feature between two and four cores and integrated graphics, and it has the "high-end desktop" processors, which feature between six and eight cores and have no integrated graphics.

Intel recently launched its Haswell-based high-end desktop processors and brought to market a six-core processor for about $390 street price. The platform costs for the mainstream processors are lower (cheaper motherboards, lower memory prices, and so on), but if Intel prices Broadwell-K as I expect that it will, then this could actually drive many PC enthusiasts -- most of whom don't really care about integrated graphics -- to the high-end desktop platform.

Can this succeed?
The big unknown for whether Intel can push even more enthusiasts to the high-end desktop platform (assuming this is the company's goal) is whether the company is willing to extend the product stack into lower-priced variants. Today, the least-expensive processor on the current high-end desktop platform costs $390, but the 4690K (the cheapest "unlocked" mainstream chip) retails for about $220. 

The problem with potentially offering lower core counts on this platform is that these chips are derived from server processors. While Intel sells four-core server chips, these are currently just eight-core processors with four cores disabled. From a margin perspective, it might make more sense to sell the smaller laptop-chip-based four-core processor than a disabled server-oriented eight-core chip. 

It will be interesting to see what Intel's long-term strategy for enthusiast desktops is going forward, and I think Broadwell-K pricing will be critical to figuring out exactly what the company has in mind there.