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Why is it that Celerons are so cheap?

This post isn't a troll or anything but with Linus' recent video covering the law of diminishing return by comparing the G4560 to the 7820X, I came to a strange realisation.

The Celerons, in terms of specifications, are actually the best value processors around.

I mean think about it, 1/2 the cores of an i5, 1/2 the cache of an i5, with similar clockspeeds as lower end i5s like the 6400, but with a much lower price tag.

I mean the G3930 is like $35. That is 5 times less expensive than an i5 6400, but just 1/2 the performance on paper. Am I missing something here? Can somebody explain why are they so freaking cheap?

Just to be clear, I am not saying Celerons can do much, 2 cores are just inseffiecent in 2017, albeit, 2 strong cores. It's just really strange that, they're that cheap.

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you still have to buy a motherboard and ram, most people, after spend $ on both of those don't cheap out on a cpu that can't even play games. i5's cost much more to produce and the demand for them is much higher, so the price is much higher.

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8 minutes ago, superpentium said:

This post isn't a troll or anything but with Linus' recent video covering the law of diminishing return by comparing the G4560 to the 7820X, I came to a strange realisation.

The Celerons, in terms of specifications, are actually the best value processors around.

I mean think about it, 1/2 the cores of an i5, 1/2 the cache of an i5, with similar clockspeeds as lower end i5s like the 6400, but with a much lower price tag.

I mean the G3930 is like $35. That is 5 times less expensive than an i5 6400, but just 1/2 the performance on paper. Am I missing something here? Can somebody explain why are they so freaking cheap?

Just to be clear, I am not saying Celerons can do much, 2 cores are just inseffiecent in 2017, albeit, 2 strong cores. It's just really strange that, they're that cheap.

Well Jayztwocents did an interesting video where he did two builds with a Dual core pentium G4560 and a Ryzen 3 1200. It showed that the Pentium G4560 is very capable for gaming, but only costs about half of an i5 for example. ($90)

 

You won't get double the performance for double the price usually. A Geforce GTX 1080Ti at $700 is not twice as fast as a GTX 1070 at $350, even though it costs twice as much.

 

Companies price things based on what people are willing to pay for it, not what it is actually delivering or what it costs to produce. Some people want that i5 performance, like you said, dual core is not enough for some applications. So they figured that around $180 is what people are willing to pay, so that is what they price it at.

 

Same thing for ultra high-end stuff: they sell a Titan XP for $1000+, because some people just want to buy the best there is, and don't care how much it costs. It does not make sense value-wise.

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No hyperthreading is the major weak point for them, hence their dirt-cheap price. Celerons are really only suited for office-type work or for Grandma Judith who just wants to watch cat videos on YouTube and occasionally check her Prodigy email for chain-mail.

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They're cheap because Intel wants you to buy into their "Platform" knowing that you'll eventually upgrade to a better CPU.  Think of it as gaming consoles that Microsoft and Sony sell you at a loss to get you to buy games which is where the real money is made.

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43 minutes ago, maartendc said:

Well Jayztwocents did an interesting video where he did two builds with a Dual core pentium G4560 and a Ryzen 3 1200. It showed that the Pentium G4560 is very capable for gaming, but only costs about half of an i5 for example. ($90)

 

You won't get double the performance for double the price usually. A Geforce GTX 1080Ti at $700 is not twice as fast as a GTX 1070 at $350, even though it costs twice as much.

 

Companies price things based on what people are willing to pay for it, not what it is actually delivering or what it costs to produce. Some people want that i5 performance, like you said, dual core is not enough for some applications. So they figured that around $180 is what people are willing to pay, so that is what they price it at.

 

Same thing for ultra high-end stuff: they sell a Titan XP for $1000+, because some people just want to buy the best there is, and don't care how much it costs. It does not make sense value-wise.

That might be true, but if you bring graphics cards into the equation, you might realize that there, the lowest tier products are typically just as bad of a value as the higher end ones. I mean look at the GT 1030/RX 550. They are a joke in terms of performance per dollar, the situation however doesn't really reflect the CPU market however, cause the bottom tier CPUs are still competitively priced.
Also I watched that video, and he went with an A320 board, which completely crippled the R3's performance, I know this is besides the point and I am digressing but for someone who use to constantly tell his viewers that overclocking is free performance he really dropped the ball in that video.

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42 minutes ago, cpuwaiy said:

They're cheap because Intel wants you to buy into their "Platform" knowing that you'll eventually upgrade to a better CPU.  Think of it as gaming consoles that Microsoft and Sony sell you at a loss to get you to buy games which is where the real money is made.

Fair point!

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43 minutes ago, tmcclelland455 said:

No hyperthreading is the major weak point for them, hence their dirt-cheap price. Celerons are really only suited for office-type work or for Grandma Judith who just wants to watch cat videos on YouTube and occasionally check her Prodigy email for chain-mail.

I am well aware of that, but still, the same could have been said for really low end graphics cards a few years ago, think of something like the GT 520, it was only really viable for people who needed a really basic computer, yet the prices were awful.

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Well, celerons have no AVX, they don't clock as high, have no turbo boost and they have crippled igpu. Those are the main differences. 

Intel is just trying to sell them as cheap as possible because it still is better than tossing them. 

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4 hours ago, superpentium said:

I am well aware of that, but still, the same could have been said for really low end graphics cards a few years ago, think of something like the GT 520, it was only really viable for people who needed a really basic computer, yet the prices were awful.

Low demand product = higher prices

 

Though that said there's the tipping point of high demand = high prices because there isn't enough supply (as is the case with the only reasonable RX cards and the 1060).

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19 hours ago, superpentium said:

That might be true, but if you bring graphics cards into the equation, you might realize that there, the lowest tier products are typically just as bad of a value as the higher end ones. I mean look at the GT 1030/RX 550. They are a joke in terms of performance per dollar, the situation however doesn't really reflect the CPU market however, cause the bottom tier CPUs are still competitively priced.
Also I watched that video, and he went with an A320 board, which completely crippled the R3's performance, I know this is besides the point and I am digressing but for someone who use to constantly tell his viewers that overclocking is free performance he really dropped the ball in that video.

Yeah you are right as far as low-end graphics cards are concerned, they are way overpriced for what they offer.

 

It seems that for GPU's the best bang for the buck is in the middle (GTX 1060 for example).

For CPU's the best bang for the buck is actually on the lower end (i3 or a good pentium or a Ryzen 3), provided you don't need more cores/threads for your particular application.

 

As with everything, it just depends what you want to do. If you do a lot of multithreaded work, then a dual core Pentium simply isnt enough, so it is not good "value" for you.

If I want to play everything in 4K, a GTX 1060 isn't good enough, so a 1080Ti might actually provide you the best "value" for your application.

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14 hours ago, tmcclelland455 said:

Low demand product = higher prices

Are you talking about supply and demand? That is not really what we are talking about here.

This discussion is purely about what manufacturers price their products at (MSRP).

Apple just released their iPhone X at $999. Why? Because it costs that much to make? No. Because it is good value or a fair price? No. Because they figured that is what people are willing to pay and they will maximize profits? BINGO!

 

It is just about profit maximization. https://en.wikipedia.org/wiki/Profit_maximization

There is a point on the price/quantity curve that maximizes profit.

- Too low a price, and more people will buy your product, but you are making not enough money per product.

- Too high a price, and you make more money per product, but too few people buy it.

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7 minutes ago, maartendc said:

Are you talking about supply and demand? That is not really what we are talking about here.

This discussion is purely about what manufacturers price their products at (MSRP).

Apple just released their iPhone X at $999. Why? Because it costs that much to make? No. Because it is good value or a fair price? No. Because they figured that is what people are willing to pay and they will maximize profits? BINGO!

 

It is just about profit maximization. https://en.wikipedia.org/wiki/Profit_maximization

There is a point on the price/quantity curve that maximizes profit.

- Too low a price, and more people will buy your product, but you are making not enough money per product.

- Too high a price, and you make more money per product, but too few people buy it.

Not many people buy Celerons outside of low-end laptops, so naturally the price will still be higher. For all Intel cares they could price it at 300 bucks and produce very little for the desktop (outside of OEMs of course), and that might even make them more money from people buying Pentiums.

 

And really, dragging Apple into a price-gouge convo? Really? That's the best you can do? Everyone and their mother who isn't an Apple sheep knows that Apple fist fucks you out of your money for what you get.

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37 minutes ago, tmcclelland455 said:

Not many people buy Celerons outside of low-end laptops, so naturally the price will still be higher. For all Intel cares they could price it at 300 bucks and produce very little for the desktop (outside of OEMs of course), and that might even make them more money from people buying Pentiums.

 

And really, dragging Apple into a price-gouge convo? Really? That's the best you can do? Everyone and their mother who isn't an Apple sheep knows that Apple fist fucks you out of your money for what you get.

Relax buddy, take a chill pill. It is just an example, and a very good one at that to illustrate my point about profit maximization.

 

I just don;t get your example on the Celerons. What is your point? Celerons are a good product for the price, and it is positioned to be a low end product. They would make less money if they didnt have it, because people who can only afford a Celeron could not afford a Pentium, hence they would not buy anything from Intel.

 

That is why for manufacturers it is smart to have a complete stack of products at every price range (celerons, pentiums, i3, i5, i7, i9, etc. etc). So no matter what your budget is, you can buy an Intel product for that budget.

 

Same reason manufacturers sometimes intentionally cripple some GPU's and disable some cores to make a lower tier product at a lower price. You make more money if you have a range of products instead of only a high end product. In the past, some GPU's could be flashed with a different BIOS to a more expensive product. It is cheaper for them to R&D one card and cripple it, versus R&D'ing multiple cards. They want to have a product in each price range, so they sell the crippled product for cheaper. Volkswagen has even done this with their car engines in the past (VW Golf could be chipped to unlock more engine performance that was only available in the TDI versions, which cost a premium)

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