After the announcement of the new chips, Intel’s shares outperformed and there was a 3.8 percent fall for Nvidia shares and a three percent decline for AMD stock. However we are not convinced, if only because Intel is playing the game in the same way that it always has, and the rules have changed.
Market research firm Gartner’s latest data for the third quarter of 2017 shows the dwindling health of overall PC market and everyone is in trouble.
Gartner says global PC shipments fell 3.6 percent year-on-year for a combined total of 67 million units. That’s down from 69.6 million units during the same quarter last year. HP shipped 14.5 million units, while Lenovo came second with 14.3 million. Dell managed to capture the third place with 10.1 million units, followed by Asus and Apple with 4.8 million and 4.6 million units shipped, respectively.
So on a general PC malaise and arguably stronger competition from AMD Intel has to do a little more than tip up and claim its 8th generation processors are getting a boost of up to 40 percent over the 7th generation and expect buyers to bite.
The mobile processor takes advantage of four CPUs that allows for unprecedented performance and battery life improvements. However what Intel has not done is significantly drop its prices instead it is trying to sell the chips on the basis of technology which is pretty meh.
“Kaby Lake Refresh is designed for thin notebooks, 2-in-1s and clamshell computers and lets users watch up to 10 hours of 4K video with one charge. Users can take photos and edit them 25 to 28 percent faster than the previous generation”, Intel claims.
Is that the best you can come up with? Photo-editing? When a punter buys a machine in times of low demand and higher competition they are more likely to be influenced by price.
But Intel is not really budging on that. Suppose you buy a new laptop with the latest Intel Core i7-8550U. For that processor, Intel suggests a “recommended customer price” of $409.
There is no evidence that Intel is seriously changing its pricing structure to cope with AMD or the falling PC market.
Amazon.co.uk is charging £281 for the Core i7-7700K, which is its best seller. It was £312.97 in July. The Core i5-7500 costs £161, down from £176.97 in July. However, the AMD Ryzen 7 1700 now costs £262, compared with around £278 in July, while the Ryzen 5 1600X has fallen from around £220 to £187. The Intel chip prices have fallen by around 10 per cent, but the AMD chips are down by six percent and 15 percent.
AMD has normally undercut Intel but with Ryzen line, it’s getting closer to Intel pricing levels but competing on features instead. Intel is shrugging and saying so what?