Features not frequency key to greater profitability in HEDT CPU market, says HWinsights

September 23, 2015 – Within the desktop CPU market, the HEDT segment (which targets enthusiasts, overclockers, high-end gamers, and professional workstations) offers the ability for chipmakers and their partners to increase profitability by offering premium products at very-high prices. A new analysis report from HWinsights has determined that in terms of product differentiation, a unique feature set is the primary factor chipmakers need to prioritize to maximize profitably. The report also finds that increasing clock-frequency has a minimal impact on overcoming price-sensitivity among enthusiast buyers.

The HWinsights Analyst Report titled “Intel HEDT in transition, from Bloomfield to Haswell-E” assesses the market’s response to successive generations of Intel HEDT products starting with the Bloomfield family launched in late-2008 up to the current Haswell-E family. The report finds that the decision over which SKU to purchase in a given series of HEDT CPUs is strongly weighted towards models that offer unique features – irrespective of price. In addition, the analysis indicates that, in the absence of any differentiating feature other than clock-frequency, enthusiasts will opt for the cheapest option.

“When performance enthusiasts are offered an innovative and enticing new product platform, typically the most affordable and the most premium product SKUs will sell well. The Core i7 980X “Gulftown” (first enthusiast six-core) and the Core i7 5960X “Haswell-E” (first enthusiast eight-core) are both highly successful premium models priced at the $1,000 (USD) mark.

“When a new platform is not enticing, only a small group of enthusiasts will adopt the new platform, typically purchasing the least expensive full-featured model. For Sandy Bridge-E, the most popular SKU was the Core i7 3930K ($583) and for Ivy Bridge-E the more popular SKU was the Core i7 4930K ($555).”

Using the metric accumulated value (popularity x list price at launch), the most successful HEDT CPU models to date are the Core i7 980X and Core i7 920. This is significant since the two models also represent the extreme ends of the HEDT price range with the 920 carrying a list price at launch of $284 and the 980X $999.

According to HWinsights, the key facts behind this finding are:

The Bloomfield-Based Core i7 920 with a clock-frequency of 2.66GHz entered the market alongside the Core i7 940 (2.93GHz, list price at launch of $562) and the Core i7 965 (3.2GHz, list price at launch of $999). The main market separation between the high-end and low-end SKUs was their clock-frequencies, and a significant mark-up in price. Although enthusiasts were keen to switch to the new Nehalem-microarchitecture, they were not interested in paying a high premium for higher clock-frequencies. The Core i7 920 generated a high accumulated value due to its high popularity, despite its low price.

The Gulftown-based Core i7 980X was the first six-core CPU for the HEDT market. Compared to its predecessor the Core i7 975, the 980X also offered 4MB more of L3 cache (total 12MB), while its clock-frequency at 3.33GHz and list price at launch of $999 remained the same. Since its differentiating features were at the fundamental hardware level, enthusiasts wanting “the best on the market” had no option than to pay the high asking price. Despite the premium pricing, the 980X was around three-times more popular than the 975 and generated an accumulated value 41% more than the high-bar set by the 920.

Haswell-E on track for success

Looking at the current-generation HEDT family the report finds that the high-end Core i7 5960X has already surpassed most other HEDT CPUs to become the third-highest in terms of accumulated value, despite only being on the market for one year.

Combined, the three Haswell-E CPUs have already surpassed the Sandy-Bridge-E and Ivy-Bridge-E families in terms of accumulated value, and are close to the level the Gulftown family generated over its three-year cycle, HWinsights observed.

The rapid rise to success of the Haswell-E lineup is due to material differentiation in hardware features. Haswell-E introduces support for DDR4 which serves as a motivator to upgrade to the new platform even for enthusiasts who already own Sandy-Bridge-E or Ivy-Bridge-E. In addition, the high-end Core i7 5960X, with a list price at launch of $999, offers eight-cores, the most currently available in the HEDT segment, and two more than the lower-cost SKUs.

Key Insights

• Core i7 980X (first 6-core) most successful HEDT CPU by accumulated value
• Sandy-Bridge-E and Ivy-Bridge-E accumulated values lower than for Gulftown
• Core i7 5960X (first 8-core) on track to replicate success of 980X

The complete report is available to purchase now. More information and a free sample download are available from the HWinsights website.