Dear Intel: Sue Me | Hacker News Reader

Dear Intel: Sue Me

zachbruhnke.com

10 pointszbruhnke41 comments

Intel's recent threat to sue consumers or companies who choose to unlock the capabilities of their processors spurred this rant, I apologize to those who did not enjoy it. thanks for reading

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Let me get this straight. Intel sells you a chip with X amount of L3 cache. You buy the CPU because you agree that's a fair price for a CPU with that much cache. You later find out that Intel snuck an extra megabyte of L3 cache into the silicon, so you can upgrade over the Internet instead of having a new part shipped to you. And you think this is immoral?

Intel could just as easily have (a) charged everyone $50 more for the CPU, even those who don't care about the performance upgrade; or (b) shipped a part that couldn't be upgraded at any price. Both of these outcomes are strictly worse for consumers.

Or they could have sold him a chip with X amount of L3 cache and no extra cache snuck in, and then priced the chip lower since it costs them less to make. That choice is better for the consumer.

You're only taking variable costs into account, and forgetting about the likely tremendous fixed costs of having different manufacturing lines so they can vary the L3 cache for different versions of the same chip.

That choice isn't better for the consumer. The choice you've set up is between:

(1) A chip that costs less because it has fewer capabilities that can't be upgraded.

(2) A chip that costs less because it has fewer capabilities that can be upgraded.

In neither (1) nor (2) does the price of an Intel CPU have anything to do with the cost of (say) "a transistor". You cannot go to the transistor mines and harvest yourself CPU ore; chips are not commodities.

It would probably cost them more to make a CPU with less L3 when they already have a design and production line for CPUs with larger L3.

The price of goods does not reflect the costs, it reflects the demand. It only reflects the costs in a highly competitive, low-barrier to entry market.

Think about how you make your money. Are you paid based on the cost of your services or the demand? Which would you prefer?

Intel build a processor with X amount of L3 cache.

They sell it for $400 to initial buyers but "disable" 100 MB of L3 cache without telling them. Then after 6 months, just to make money of the initial buyers again of the same chip, offer this processor "upgrade" for $50. This is immoral and the initial buyers will feel cheated.

This case is not like software where programmers worked on something and then ask a price for upgrade. Intel had already made all investment and work before the purchase. Intel then already took a profit for selling the processor.

Adobe requires $0 to build a copy of Photoshop. Pfizer requires $0.03 to make a pill. What does vendor cost have to do with market price?

The feeling customers have of being "ripped off" is irrational. If you buy a part with X L3 cache and find out later that you're a web page away from X+1M L3 cache, your vendor did you a favor.

Intel and AMD sell chips with some bad cache or faulty cores. What they do is disable the faulty components and sell it a lesser specced CPU. When manufacturing ramps up and kinks are worked out they might have to disable working parts to be produce those lesser specced (and cheaper) CPUs. All they're doing now is including a switch that customers can pay to flip, enabling those disabled components.

The only difference after this announcement is that people who may not have known about this practice now know about it, and Intel is giving people a "switch" to turn these parts on.

"disable" "upgrade"

It's semantics. It's all in how you frame it: http://en.wikipedia.org/wiki/Framing_effect_(psychology)

I think the part that people have trouble with is the idea of not having control over their own hardware. Not that I agree with this, but the reasoning is something like: if you buy a physical device, you own it, and should be able to do anything you want with it, including using its full capabilities.

The conflicting moral intuitions here are about ownership of an object vs. payment in exchange for a set of benefits. In terms of the latter, this is clearly a case where everyone wins, but that doesn’t prevent it from seeming “wrong” in terms of the former.

This is really quite similar to the “wrongness” people feel about, say, region-locked DVDs.

> if you buy a physical device, you own it, and should be able to do anything you want with it, including using its full capabilities.

Previously there was no official way to enable disabled cache or cores, though some motherboards provided such functionality. Now there is an official way but you have to pay for it. Intel is giving you more control over the hardware they sell you. I guess we could debate whether or not it's fair to charge for that capability, but considering that till now the general consensus is that low-end CPUs are ridiculously cheap for the given performance I don't feel like there's much to debate. 2 years after buying a low-end CPU you can pay $50 and unlock some extra cache or cores for even more performance, instead of upgrading to a new CPU (and possibly motherboard and RAM). Sounds like a win to me.

> Intel is selling you more control over the hardware they sell you

In any way is it worse than not having that control at all (ie the current status quo)?

I don’t disagree with you; I’m just trying to explain the possible logic behind people’s discomfort.

Perhaps Pareto efficiency is an underlying cause for this response. Treating the chip as a fait accompli, boosting the cache doesn't hurt Intel and it benefits the consumer. In a world where white cotton tee shirts can sell for hundreds of dollars, option (a) satisfies more notions of "fairness".

"An economic system that is not Pareto efficient implies that a certain change in allocation of goods (for example) may result in some individuals being made "better off" with no individual being made worse off, and therefore can be made more Pareto efficient through a Pareto improvement."

http://en.wikipedia.org/wiki/Pareto_efficiency

But Intel is already also selling higher end models with those features enabled, at a higher price point of course.

Perhaps the call to 'sue me' would have more weight if you'd already managed to hack the unlocking process.

But anyway, how are Intel doing anything to the 'free market'? In a free market Intel can sell whatever they like for whatever the market will pay for it. They're not quite a monopoly so if you don't like the 'unlockable' processor, don't buy a machine that uses it.

The only way I can make this rant make sense in my head is if the writer assumes that it's immoral to make a profit at all. My understanding of free market economics is limited, but I suggest that the author of that rant has an even worse understanding than I do.

What I want to know is if buyers of the chip who don't buy the upgrade are still paying something for the unused hardware.

Analogy: I pay a contractor to build me a house and specify an 800 sq ft finished basement. The contractor actually builds the house with a 1200 sq ft basement, but walls off 400 sq ft of it so that it appears to only have an 800 sq ft basement. For an modest fee (less than it would normally cost to have a real 800 sq ft basement expanded by 400 sq ft), I can have the contractor come in later and open up the extra 400 sq feet.

Whether this is cool or not depends on just how the contractor charged for the project. If it cost the contractor more to construct that extra 400 sq ft than it would to have constructed just an 800 sq ft basement, and he included that cost in figuring what he charged me, than I'd be mightily annoyed.

If, on the other hand, the extra costs associated with that extra 400 sq ft were eaten by the contractor, then I'd be reasonably OK with it.

Same with Intel. If they are charging me what they would have normally charged for a CPU with the "extra" stuff, and then charging me $50 later if I actually want to use it, then I would be annoyed. On the other hand, if they are charging what they would have normally charged for a chip that doesn't have the extra stuff, and so they are eating the cost of building a chip that costs more to make on speculation that I might later pay to buy access to the extras, that is fine.

The chips are not priced on cost, they're priced at the level the market will bare, to earn back the massive fixed costs of design and fab construction.

Paying for unused hardware is a faulty way to think about it - in reality, you're paying a price set based on the performance of the part and its competition in the marketplace.

Let me start off by saying, clearly I am the author of this post. While I understand the call to "sue me" seems to not carry much weight I assure you it is not far from being done and posted on my site. And while I can appreciate your post concerning my lack of free market knowledge you should know that it could not be further from the truth. I have built and sold several (albeit small) companies since I turned 18 and have continued on a daily basis to work on new products and releases every day because it's what I love not because it makes me money. While I understand the frustrations of some people with my rant (and that's exactly what this article is) I would also like everyone to realize what it is they are doing. Some would argue that they sell these at a going rate, however the truth is demand sets the price of processors. The fact that most computer users wait for prices to drop before purchasing the highest end products is a testament to that. However intel effectively takes advantage of those of us who always want the newest and best technology and then proceeds to drop the price to "fair market value" for the rest of consumers only to sell another "higher end" chip with several more features that in many cases are just unlocked from the previous version of the product. Paying for technology, should in effect, be paying for the research and development of the people who put their efforts into it. Intel simply believes that in paying for technology you should be paying for what they choose. My point in writing this article is not that it was a new concept. It was not even that intel was alone in these business practices, it was simply to point out that these practices are not fair to the consumers who support these companies. I never said this was not an example of the free market, I simply stated that sometimes the free market simply is not a fair market for the consumers who drive it.

This is nonsense. Intel are trialling this on some low-end CPUs. They're not trying to aim this at the people who read Hacker News and always want the latest shiny tech.

Anyway, Intel aren't making CPUs for the love of it. They're doing it to make money for their shareholders. This isn't immoral or unfair. Paying for technology is like paying for anything, if you're pricing based on your costs then you're doing it wrong. You set your prices to maximise profit, not to meet someone's preconceived notion of 'fair'.

"However intel effectively takes advantage of those of us..."

Since there is no monopoly, you have the right to choose to buy an Intel product or a competitor. You have the choice. It's your money; therefore, it's your power. It's not correct to say that Intel is taking advantage of you. The people of Bhopal are victims; you are not a victim.

"Paying for technology, should in effect, be paying for the research and development of the people who put their efforts into it."

Stated in another way, you believe that the prices of things should reflect the cost to produce those things. So your real complaint is not with Intel, it's with how the economy works.

I think in the above post I already clearly acknowledged this was not solely against intel. Although this article was titled with such notation. What irks me as a consumer is the idea that companies set pricing along no guidelines besides making profit. Most companies were started because of a love or interest in something. However inevitably at some point nearly all companies lose sight of their love for a product and fall in love with money. I would be willing to wager that intel once built the best processor they could for the best pricepoint they could. This article simply states that these companies lose track of those ideas at some point. Again, I did not say this was new, or that several companies were not involved in these processes. As an opinion I simply do not think it is right. Are we all not entitled to an opinion?

I disagree strongly: I imagine that most companies are started to make money. Ideally someone can make money 'because of a love or interest in something', but that's not always going to be the case.

I think you have an overly romantic and naive view of the world, which is why you're so angry at Intel for doing something that's in no way unfair or immoral.

I do not think my view of the world is either romantic nor naive. I was simply raised with a different mindset. Make no mistake, I have sold software, I have made a premium on some of that software I sold as well. But I did not sell the software to customers with scaled back capabilities and tell them that this is basically a "lite" version of what they could get if they paid "x" amount more dollars. Maybe that makes me a bad capitalist, or just dumb, but that is how I have always operated and it has made me a fairly nice living at a fairly young age. What i have done in other instances however is tell companies that if they would like other features added I could work to add those features at an additional cost. Maybe that is my real rant here. At least if Intel sold these processors at face value telling end users that there were so called "upgradable" processors before they were ever purchased then I would not have as much of an issue. i simply believe in buying and selling products at face value. So perhaps my problem actually lies in the idea that these were sold at face value as one thing and then weeks, months or even just days later they were told, oh but wait, we could also make it do this if you wished, but that will cost you $(insert arbitrary amount here)

I think this is probably about how the situation is framed rather than the objective facts.

Consider a restaurant that charges $3.50 for a cup of coffee unless you are a senior citizen in which case the charge is $2.50. Here are two ways that this can be framed:

* Coffee: $2.50 (add $1.00 surcharge if you are young)

* Coffee: $3.50 ($1.00 discount if you are a senior citizen)

The objective facts are the same but our subjective feelings are different. We hate getting "charged" for things but don't mind a higher baseline price if we can get a "discount".

Are you sure the core of the problem isn't just that it "feels wrong" that the chip has parts that are disabled?

"So perhaps my problem actually lies in the idea that these were sold at face value as one thing and then weeks, months or even just days later they were told, oh but wait, we could also make it do this if you wished, but that will cost you $(insert arbitrary amount here)"

I really have a hard time seeing how this is a bad thing. If I see a product and I agree that it's worth my money, I buy it. If it turns out that the product can do more than I originally expected it to, I really have a hard time seeing this as a problem. I only see the problem if the product ends up doing less than I expected.

As I understand it, Intel are not selling these CPUs directly to consumers at all. The CPUs are in a specific model of Gateway machine.

I presume that Intel will have discussed with this Gateway, since it has their name on the card, and will have sold the CPUs to them 'at face value'.

Did the use of these CPUs affect Gateway's pricing for the machines they sold to consumers? Seems unlikely, the low-end PC market has no margin to allow manufacturers to charge extra for something that's not an immediate benefit.

But companies (and individuals for that matter) need money to pursue their love/interest in something. Without reaping profits from low end, they couldn't afford to make those awesome high end CPUs.

Thanks for clarifying; I get where you're coming from now. It's really not a bad ideal that you express: that profit should not become the ultimate motive but something else should be the core driver of the business (a passion for solving the customers' problems, for example). I think that when a company takes on investment money from others then their focus must shift more toward making money; otherwise they would be using the investment money unethically. However, if you bootstrap a business, you have more control over the direction of the company and have a little bit more wiggle room over to what extent profit plays a part in the company's mission.

So it turns out the guy hasn't actually built any of this upgrade circumvention software/firmware yet, so I'm not exactly sure what he's asking Intel to sue him for.

Perhaps he should go play with the cracked HDCP crypto key instead; Intel says it will sue anyone who uses that (http://www.wired.com/threatlevel/2010/09/intel-threatens-con...)

I don't get why people are now angry at Intel. Both Intel and AMD have disabled stuff from their lower end for a long time. And now that Intel allows you to actually recover those features (which would be disabled in any case), they are the bad guys? I just don't follow that logic. Should Intel only make $1000 high end chips?

edit: I just want to add that if the unlocking happens via microcode update then you have practically zero chance of cracking it without at least copyright infringement.

And I don't know about the rest of you guys but I'd be bit nervous about applying a microcode update from unoffical sources.

I'm shocked, shocked! that capitalist corporations charge what the market will bear for their products.

Will Intel be chasing people legally for cracking this facility? If so, what legal means will they be using?

I am most worried about these legal implications. Never mind the L3 cache size; I would prefer it to remain legal for me to hack and modify my own hardware. I don't want to lose control over this ability. If companies can dictate what I do with the hardware after I buy it, then to what extent will this affect "hackability" generally?

Let's reverse that, instead of writing what someone might do, I'll offer $250 for the person that cracks this upgrade scheme first and provides an easy to use piece of software to do the unlocking.

Anybody else want to chip in to increase the prize?

I've been annoyed at Intel for awhile, and I've been happily voting with my pocketbook by only buying AMD powered laptops. Latest Intel annoyance: consumer grade "Pentium Dual-Core" chips, which are basically Core 2 Duos without VT-x instructions, so they are 64 bit processors that can't run 64-bit VM's. OK, that's old news, but annoying nonetheless when you've got one you are trying to get work done on.

Is this new? Am I misremembering that 3/486sx chips were dx chips with the coprocessor disabled?

Most chip manufacturers do this, but usually the extra silicon is disabled because that section has failed quality gates - the same thing happens in GPUs, they know the top n% will withstand higher clock rates, so they put those in the expensive cards.

This is new because Intel knows that silicon is good (or else they couldn't sell the upgrade), but intentionally disable it. People are upset because they feel like they aren't "buying" anything, it's just a perceived tax to get what already exists (I'm not saying that this is a fair perception, only that it's what most people will feel - I think this is a plan doomed to fail)

It's much older than that. The tale is told, at least, that in the 1960s, IBM sold a model of 360 that could be upgraded to a faster model by flipping a single switch. They charged many thousands of dollars to send out a tech to flip the switch (if you did it yourself, I presume it would void the warranty).

There are firmware locks on a lot of IBM hardware still, unlocked with the right amount of $$ paid to IBM.

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