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Comment by tptacek | Hacker News Reader

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.

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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.

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.

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)

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?

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