Well, if you have owned a retail store, you should know that the typical profit margin is around 40%. Seriously. Here is a top post from a quick search on google which has electronics at 30.76%.
Now as high as it may seem to some, there are a lot of costs involved in retail and these margins are actually reasonable (really).
People see the $1100 price tag on the 6900K and think it's all going to Intel. In fact, it's more likely the retailer pays $650 to their SUPPLIER and sell on for $1100. Now the supplier's profit margin is somewhat smaller, because they deal in bulk, but it still eats into the Intel price.
My point is, if you consider the entire supply chain, I doubt Intel sells this for more than $500, which gets to $1100 by the time we can get it off some shelf. So the chip itself may in fact cost something like $250 to manufacture.
The gist of it is, if AMD are telling the truth when they say Zen is very cheap to manufacture (e.g. they can build the same at $100 and sell it for $200) then adding similar profit margins ($200 out the factory, $300 for bulk, $500 for retail) you can see how it can easily end-up half price. The cut propagate across the various profit margin ratios.
Now as high as it may seem to some, there are a lot of costs involved in retail and these margins are actually reasonable (really).
People see the $1100 price tag on the 6900K and think it's all going to Intel. In fact, it's more likely the retailer pays $650 to their SUPPLIER and sell on for $1100. Now the supplier's profit margin is somewhat smaller, because they deal in bulk, but it still eats into the Intel price.
My point is, if you consider the entire supply chain, I doubt Intel sells this for more than $500, which gets to $1100 by the time we can get it off some shelf. So the chip itself may in fact cost something like $250 to manufacture.
The gist of it is, if AMD are telling the truth when they say Zen is very cheap to manufacture (e.g. they can build the same at $100 and sell it for $200) then adding similar profit margins ($200 out the factory, $300 for bulk, $500 for retail) you can see how it can easily end-up half price. The cut propagate across the various profit margin ratios.
! Sorry folks, but AMD aren't interested in you for THIS particular CPU, so forget it. There will of course be cheaper offerings further down the line, and perhaps the top end Ryzen price will be an indicator of their pricing structure, but straight out the gate they are going for the top end enthusiasts who would otherwise be considering spending over £1K anyway. It will be niche but if they nail it in the performance stakes it's going to be their flagship and get people excited about AMD again. Cheaper options will come later and what's going to be interesting is how these stack up against the Kaby i3/i5 options.
