AMD's price/performance conundrum: Can it keep its high-end customers?

Charting the Intel/AMD battlefield

The situation ahead of AMD is a daunting one, and the best way to get a visual feel of it is by charting it. So using a system I adapted a few years ago for TG Daily, BetaNews used performance data from Tom's Hardware and pricing data from PriceWatch and leading retailers such as Newegg.com, to determine exactly where the price/performance curves for these two multicore CPU producers lie at the moment.

Here's how our chart works: We calculated performance scores for every major CPU in AMD's and Intel's product line, on major benchmark tests in five separate categories: raw calculation (PCMark05), graphics data manipulation (3DMark06 Graphics), compression (WinRAR 3.7 beta 8), audio encoding (iTunes 7.1.1.5) and video encoding (Mainconcept H.264). The scores for every CPU in those tests were gauged against the performance of an old Intel CPU, the single-core Pentium 4 520. For example, AMD's Phenom 9700 scored a 2.33 in the 3DMark06 test, which means it's 233% better than the old P4 520 scored. The old P4 gives us a baseline against which to measure all the multicores.

Then we averaged the five indexes, so that each test represents 20% of the final score. The test results for AMD's new processors aren't yet available, but our current tally helps us to get a clearer picture of how and where AMD needs to distinguish itself.

The chart plots the results as price on the Y axis, performance on the X. The green triangles represent where AMD's processors fall in line; the blue boxes are Intel's. The dotted lines for both are the performance curves, and they don't look so much like curves on this plot because our price axis is on a logarithmic scale. All of AMD's current processors sell below $350; right now, some of Intel's high-end performers sell for over $1,000. But the curves help demonstrate how much of a performance bargain you're getting for your dollar with either brand.

At the far upper right corner is a blue box representing Intel's Core 2 Extreme QX9650. As the two curves approach one another, you can see where the QX9650 (scoring a 3.44 overall and selling for $1,045) is actually quite comparable in terms of performance for the dollar, In other words, the Intel premium over AMD at this point is quite low, even though AMD's highest performer (until today) has been the Phenom 9700 (2.68, $319).

Also, clearly breaking through enemy lines are Intel's Core 2 Duo E8400 (2.69, $199) and E8500 (2.83, $282.31). Ever since its first Conroe-series dual-core introductions in the summer of 2006, Intel appears to have intentionally "floated" one or two CPUs in its midrange, well into AMD territory (two years ago, the Core 2 Duo E6600 was the "floater"). Either model currently gives you better performance for the dollar than any AMD processor; note the sharp price difference between the E8400 and the Phenom 9700 which scores 0.01 lower overall.

As you can see by the tightly-bunched green triangles toward the bottom, there is precious little space for a triple-core CPU to stand out on AMD's price/performance curve. Does AMD risk confusing its customers with this introduction?

"I think that end users know what they want," responded AMD's director of platform marketing Leslie Sobon, "when they either go online to get their system or they walk in the door. And it really depends on how that end user self-defines what they're looking for in a system. For a lot of end users, cores matter...A lot of people want what they perceive as future-proofing. In some respects, I think that's a fair feeling for them to have. They want to buy four cores, they want to future-proof their system, and so they'll go in for that. For others, model number will matter, even though they may not necessarily understand what the model number equates to; many of them walk in and think, the bigger the model number, the better it is -- whether that's true or not.

"Other ones will walk in the door and say, 'I've got $600, $800 to spend. I've got a dollar figure in mind, and I want to get the best performing system I can get...however [that's defined]," Sobon continued.

So there's where the triple-core segment of the market resides right now: with the buyers who aren't preset on four cores, who have a set budget, and who want the best they can get for the dollar. Right now, AMD's Athlon 64 X2 6400+ -- its best performing dual-core -- scores a 2.39 and sells for $179. Meanwhile, its lowest performing quad-core -- and likely to stay lowest after today's product intro -- is the Phenom 9500, scoring 2.52 and selling for $209.

That's 13% of a Pentium 4 520 and $30 of "bandwidth," if you will, on which to establish an entire product line. AMD's new customers had better well know what they want when they walk in the door.