Introducing AMD's newest Athlon

CPU Pricing 101

The Athlon processor represents a new way of thinking at AMD. No longer content with the "budget CPU" stigma AMD has earned in the past, AMD engineers and directors strove to deliver the fastest x86 processor to date. And as impossible a task it was, they actually did it.

The birth of the Athlon CPU is a simple story of economics. AMD needed to raise the average selling price of its CPU's. You may or may not know this, but the manufacturing costs involved in building a Pentium III 600 are the same as a Pentium III 450. After all, in some cases they're the exact same chip! So why does one cost more than the other? The answer is perceived performance. Mainstream consumers read the Pentium III 600 label and believe that means it's better than a Pentium III 450. However, this isn't always the case. While the Pentium III 600 is running at a faster default speed many experienced overclockers know that with a few minutes of tinkering their Pentium III 450 easily performs just as fast as a Pentium III 550 or 600. As Intel refines their manufacturing process (i.e. they get better at making a given line of CPU's) they get so good at making Pentium III 550's and 600's that they re-label and sell them as slower Pentium III 500's and 450's. This practice isn't followed by just Intel, every chip manufacturer follows this same method. Intel can charge a premium for their Pentium III line because of its perceived performance.

The Impact of Marketing

This perceived performance comes from several things, the most popular being marketing. You don't see advertisements on television for Celeron CPU's, nor will you find these ads in newspapers or magazines. However, for the Pentium III line Intel refreshes their ads each season. In addition, Intel has built a solid brand around the Pentium name. AMD on the other hand, is traditionally known as a "budget CPU"; therefore they must charge budget CPU prices for their microprocessors.

No longer content with this moniker, AMD set out to create a CPU that would turn heads. After all, look at what happened to the other major player in the low-end CPU market, National Semiconductor's Cyrix division. In order to clean up their name AMD would have to correct several performance issues surrounding their previous K6 microarchitecture.