So Why is Intel (INTC) Cutting Prices?

When we heard that Intel (INTC - Annual Report) was cutting prices on its new quad-core chips, we said “Since AMD has no direct competitor to Intel’s quad-core design, it is somewhat troubling that Intel would be lowering the price so early.  It is one thing to have aggressive price cuts in older designs in order to clear out inventory. It is quite another thing to discount the latest and, presumably, greatest products.”

A commenter replied, “When you say that AMD is no direct competitor to Intel, this is partly true, and may explain why AMD proposal sounds better than Intel, AMD is proposing today a platform with 2 dual core with the possibility to migrate to an 8 core system when AMD’s quad core will be available.”

Well, the results are in. AMD Quad FX slaughtered by a single Intel CPU | George Ou | ZDNet.com reports:

All the reviews are in for AMD’s new “4×4″ Quad FX dual CPU platform and it loses nearly every single real world benchmark to a single Intel CPU while consuming more than twice the electricity. We basically see two FX-74 3.0 GHz processors getting slaughtered by a single Intel QX6700 2.66 GHz quad core processor! Ironically, three of the four benchmark sites I link to give such contradictory glowing conclusions for the Quad FX in spite of their own data showing AMD being slaughter that Baghdad Bob would be proud. Here are the four reviews of which only TomsHardware had a realistic conclusion that matched their actual data.* FiringSquad
* [H] Enthusiast
* TomsHardware
* Hot Hardware

From highly optimized multi-core applications like 3D rendering and Video encoding to single threaded applications like games the AMD Quad FX either lost by a little or it lost by a lot.

So we ask again: Just why is Intel cutting prices on the latest and greatest processors?

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