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In 2017, the chip giant Intel (NASDAQ: INTC) reported that its sales of desktop platforms were close to $ 11.65 billion, a decrease of almost 5.9% from the previous year. Intel's data showed that, while the average sales prices of the desktop platform were stable compared to those released in 2016, unit shipments were down 5%. Do not forget that there are probably rounding, which is why these last two data do not netly lead to the decline in reported earnings.
In the first half of 2018, however, declines not only stopped but also reversed. In fact, Intel's desktop revenue grew nearly 4.1% year-over-year during this period. This reversal was not due to the growth of unit shipments. In fact, the company reported that office platform unit shipments were down 8% from the previous year. Instead, it came from a rise in average selling prices.
Source of the image: Intel.
In other words, Intel did not sell as many desktop processors in the first half of 2018 as during the first half of 2017, but the processors that it sold were, on average, more expensive.
In the second quarter, Acting Chief Financial Officer and CEO Bob Swan said, "At the same time, consumer interest in gaming and our absolute leadership in performance strengthens the enthusiast sector. producing another exceptional quarter in the gaming sector. "
Let's see how the new range of Intel desktop processors for the gaming market could improve the average selling price of the company's desktop processors.
Today and tomorrow
Here is what Intel's mainstream processor processor family currently looks like:
| Processor | Intel recommended price |
|---|---|
| Core i7-8086K | N / A |
| Core i7-8700K | $ 359 to $ 370 |
| Core i5-8600K | $ 257 to $ 258 |
| Core i3-8350K | $ 168 to $ 179 |
Data source: Intel ARK.
The main parts of the range, the Core i7-8700K and the Core i7-8086K "limited edition", are considered Core i7 processors, and Intel indicates that the price recommended by the customer (RCP) for the Core i7-8700K is between $ 359 and over $ 370.
It has been revealed for some time now that the next generation of mainstream Intel desktop processors would include a part known as the Core i9-9900K. In a recent analysis, I thought that the Core i9-9900K, because of its high-end branding, would have a higher price than the current Core i7-8700K.
According to Silicon Lottery (via Internet Archive), the next Core i7-9700K will carry a $ 369.99 ROE, and its high-end counterpart, the Core i9-9900K, will have a ROE of $ 479.99. Silicon Lottery has since removed these prices from its website, but a representative of the site said in a message posted on the forum that these prices came from a vendor "which generally corresponds to the recommended retail price by Intel".
If this price is correct, it seems that Intel's RCP for the next Core i9-9900K is about $ 110 higher than that of its Core i7 counterpart. Considering that this delta is similar to the one between the RCP of the current Core i5-8600K and the high-end Core i7-8700K, I would say that Silicon Lottery's price information passes a basic test.
Impact on the product range
As customers choose the Core i9-9900K rather than the Core i7-9700K, average consumer computer prices for Intel enthusiasts are expected to increase. In a previous analysis, I wrote the following about the Core i9-9900K versus the Core i7-9700K: "Intel also seems to have segmented its new product line in such a way that there are many obvious reasons for potential buyers to choose the Core i9 on the Core i7 – for example, HyperThreading technology, more cache and higher frequencies. "
I will not fail to closely monitor the evolution of average sales prices of Intel desktop computers in the coming quarters, as well as any qualitative comments provided by management regarding future profit calls. . Stay tuned.
Ashraf Eassa does not hold any of the shares mentioned. The Motley Fool has no position in the mentioned actions. Motley Fool has a disclosure policy.
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