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Blog: Hardware Intel Price Cuts: Now You See it, Now You Don't
Kristopher Kubicki (Blog) - July 24, 2007 1:17 AM

36 comment(s) - last by nemrod.. on Jul 26 at 2:58 PM

The industry average for the lowest pricing across the top online merchants, by volume, for the Intel Core 2 Quad Q6600 processor. (Source: Dynamite Data)

Inventory crunch erases the great savings of Intel's cheap quad-cores

The monstrous Intel price cuts yesterday were one of the worst kept secrets on the Internet. I realized this when my step-father, who's owned probably two computers in his life, mentioned to me that he was going to hold off getting a desktop until after today's price cuts.

I asked our guy Brandon Hill to put the better priced Intel CPUs in yesterday's Daily Hot Deals, only to find Mwave listed. This annoyed me until I found out why -- all the good Intel deals went out of stock in less than 24 hours.

Intel's suggested retail price for the quad-core Q6600 is $266 in quantities of 1,000. Using price monitoring software, I followed the status of this CPU over the weekend. Each of the following retailers had the Intel Q6600 priced over $500 before July 7, 2007.

MWave: $279 at 00:01 on July 21, 2007, Out of Stock by 11:00 on July 23, 2007
ClubIT: $279 at 15:35 on July 20, 2007, $305 at 13:30 on July 23, 2007
ZipZoomFly: $330 at 00:01 on July 21, 2007; $295 at 00:01 on July 22, 2007
NewEgg: $299.99 at 22:00 on July 20, 2007; Out of Stock by 17:30 on July 22, 2007
E-Wiz: $330 at 16:00 on July 20, 2007

Vendors who restocked quantities (Newegg included) returned pricing to pre-cut levels almost immediately.

So what's going on here? One major U.S. vendor, who spoke on terms of anonymity, claims his company sold no less than "five figures" worth of units since the 21st. A major Canadian retailer, also speaking on terms of anonymity, claims the unit volume for the 48 hour period after the price cuts was in the "high four figures." Yes, that's just one SKU, the Intel Q6600.

"We had distributors lined up for months with regard to quantity ... when we knew the price cuts would hit," a sales manager for a brick-and-mortar outlet claimed. "Nobody really thought we'd be out of stock the next day."

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blame.. fault..

By hellokeith on 7/24/2007 1:48:37 PM , Rating: 2

Kris,

This is not meant to be a criticism, just an observation. Reading between the lines of your article, it seems you are hinting at some blame, fault, or responsibility on Intel for the price fluctuations.

But the price fluctuations are wholly pinned on the market itself. There's simply no way Intel can know that one e-tailer is selling 7000 chips and another 13000 chips in a 48 hour period. And even if Intel could know, they can't shove that quantity down the throat of the e-tailers.

This is a pretty easy indication of supply & demand, and demonizing Intel or its retail partners for making a profit on a very high demand product is just silly. It is Intel's best interest to keep NewEgg happy, and in NewEgg's best interest to keep the customer happy.. but profit is necessary in order to stay in business. No profit, doors close, and no more hot deals period.

RE: blame.. fault..

By TomZ on 7/24/2007 2:09:25 PM , Rating: 1

That's nice, but NewEgg's $375 price (and margin) today is not competitive. Profit is good, but a 30%+ margin doesn't make sense in such a competitive market.

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RE: blame.. fault..

By therealnickdanger on 7/24/2007 3:20:31 PM , Rating: 2

... It does make sense if they can get away with it. Newegg has earned a massive following and plenty of consumers will stick with a r/etailer through thick and thin. You and I won't be paying the premium, but eight more out of ten just might.

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RE: blame.. fault..

By masher2

(blog) on 7/24/2007 5:08:29 PM , Rating: 4

I'm certainly willing to pay a premium to buy from Newegg, as every problem I've ever had from merchandise purchased from them (including problems that certainly weren't their fault) they bent over backwards to correct.

That stands in sharp contrast to rat ******* crooks like ZipZoomfly and a couple of other etailers.

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RE: blame.. fault..

By TomZ on 7/24/2007 5:32:00 PM , Rating: 2

As they say, YMMV, because I've ordered practically every computer component in our company (except for cases and power supplies) from ZZF and never had a problem.

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RE: blame.. fault..

By James Holden on 7/24/2007 5:39:25 PM , Rating: 2

Word on the street at the disti level is that Zip is sinking fast.

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RE: blame.. fault..

By masher2

(blog) on 7/24/2007 9:18:44 PM , Rating: 3

> "...and never had a problem."

That may explain why you're satisfied with them. Its only whne the merchandise doesn't work as advertised that the flaws come out.

I once ordered a $400 video card from them, which arrived DOA. They spent two weeks trying to convince me it was just an incompatibility with my motherboard. After I tested it in 2 other systems, they agreed to RMA it, but only if I paid a 25% "restocking" fee. I eventually had to do a chargeback on my credit card, which they fought bitterly. I did get all my money back, but it took months, and left an incredibly sour taste in my mouth.

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RE: blame.. fault..

By TomZ on 7/24/2007 10:32:21 PM , Rating: 2

Yes, I would quite agree - after a debacle like that, I wouldn't use them again either. I've read a lot of other complaints about ZZF's customer service, stories similar to yours.

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RE: blame.. fault..

By Kougar on 7/25/2007 7:34:35 AM , Rating: 2

It's ironic, but I know a hardware reviewer that bought a $800 AMD X2 CPU before the C2D wave from Newegg... Newegg tried to pull the same thing with him, and finally he had to fight for a chargeback on his credit card to get his money back.

ZZF once personally called me out of the blue over a simple glitch I noticed in their checkout system that they were already aware of, just to let me know I wasn't going to be surprised with a double order. It's all luck of the draw...

Almost every box I order from Newegg has been trashed by UPS, it has always been a case of Russian roulette with my hardware since they switched away from Fedex. Fedex at least doesn't "accordion" every box they touch, or drop them from heights high enough to break a corner off a motherboard.

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RE: blame.. fault..

By Darkefire on 7/25/2007 1:12:03 PM , Rating: 3

I think it varies based upon where you live. At my old house, UPS was absolute crap, delivered late in the day, and the boxes were never in the greatest of shape. Conversely, Fedex routinely delivered early, sometimes a full day ahead of schedule, and everything was pristine. At my new house, it's the exact opposite; a package I ordered from ZipZoomFly with Fedex overnight shipping (to make Christmas delivery times) never arrived, although Fedex claimed they delivered it because my signature was on file with them. We got the package three weeks later, from the people who they actually delivered it to. The Fedex people here also seem to enjoy playing rowdy games of catch with boxes, since a computer my Dad ordered arrived with one of the boxes torn on the side and dripping wet (it hadn't rained in days). I've had zero complaints with UPS here, though.

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RE: blame.. fault..

By Kougar on 7/25/2007 7:25:45 PM , Rating: 2

That is true. Ever since I moved to within a stone's throw of the main central UPS hub in this city, I have never received a UPS package until at the very end of their delivery runs... typcially between 7-10:30pm when previously I could expect them promply around mid-afternoon.

Before moving I was eagerly awaiting one package and was keeping an ear out... when I heard the UPS guy drive up I went outside to see him delivering my parcel to my neighbors then drive off. Needless to say I think it underscores that any signature/confirmed delivery from either Fedex or UPS isn't proof of jack. It's a mere formality.

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RE: blame.. fault..

By Spyvie on 7/24/2007 3:48:53 PM , Rating: 2

The advice that’s being given out in some of the overclocking forums is to wait until Newegg sells out of its stock of Q6600 and reorders. Supposedly the new shipments will be of the better clocking G0 stepping.

I wonder if this is what’s going on with the Egg's pricing, ...they now stock only the G0 stepping?

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RE: blame.. fault..

By KristopherKubicki

(blog) on 7/24/2007 4:46:25 PM , Rating: 3

Well, the problem with that is you still don't know you're getting a G0 Q6600. You will get a G0 QX6850, but there's no way to know with the Q6600. I would be surprised if they're going to have G0 on anything but the new SKUs this early.

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RE: blame.. fault..

By sleeprae on 7/24/2007 7:29:11 PM , Rating: 2

...or if G0 Q6600 (SLACR) will really overclock better. Most speculation I've seen was based on the performance of an ES C2Q chip and high-end G0 C2D chips, which don't necessarily translate to quantity chips for the C2Q. All we know for certain is that, all else being equal, it should run slightly cooler. It can also handle a higher max temp.

I opted to buy a Q6600 B3-stepping (SL9UM) for $299 at my local Microcenter. It'll suffice until Penryn. :)

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RE: blame.. fault..

By PBDragon on 7/24/2007 9:01:32 PM , Rating: 2

Well I just pickup my Q6600 in Vancouver BC today after work and it's a G0(BXxxxxxQ6600SLACR).

AFAIK most people who purchased Q6600 from NCIX (www.ncix.com)
are G0 stepping.

I don't OC so it does not really affect me too much. :)

PBDragon

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RE: blame.. fault..

By RMSistight on 7/25/2007 1:02:03 PM , Rating: 2

Actually, you can call ClubIT to pre-order your own G0 stepping Q6600 from them at the current price of $305. They are having shipments early August if you're willing to wait that long. I think $305 is a great price to be able to obtain the G0 stepping.

When you call, just specifically mention the G0 stepping. They will immediately know what you are talking about.

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RE: blame.. fault..

By ChronoReverse on 7/25/2007 7:00:56 PM , Rating: 2

All the remaining NCIX Q6600's are supposed to be G0's. Apparently they didn't have very many of those and got rid of them quickly.

I know my Q6600 was a G0. I'll be testing OC later today =)

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RE: blame.. fault..

By KristopherKubicki

(blog) on 7/24/2007 4:54:08 PM , Rating: 2

I am disappointed that the price is not stable, but I'm certainly not blaming or putting anyone at fault.

I'd like to preface any other price-related comments of mine by stating I eat and breathe component pricing. I even have some patents on this stuff, so there's a possibility I've got a little too much passion mixed in the price of a melted piece of sand sometimes :)

George Ou from Tech Republic / ZDNet emailed me saying he saw the same thing with the Intel E6600. I disagree. Below is the same price tracking software on E6600 during the April 22nd price cuts. I think the abnormality a few days out is similar to the Q6600 rebound, but the Q6600 is definitely more severe and faster.

Intel E6600 during April 22nd Price Cuts
http://images.dailytech.com/files/intel_graph_apri...

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RE: blame.. fault..

By InternetGeek on 7/25/2007 2:36:38 AM , Rating: 2

For some reason, I always assumed that these price cuts were permanent and not just a hot deal (overstock, old stock, etc).

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RE: blame.. fault..

By nemrod on 7/26/2007 2:47:27 PM , Rating: 2

In Europe, usually we need 1-2 weeks before to have about the final price after a price cut...
Now we cant find a lot of shops with Q6600 about 200-210€ without tax. (so 274$ to 288$)

http://geizhals.at/eu/a217708.html

I don't see where is the problem? There is a huge price drop, obviously resellers should sell their stocks or want to make benefits selling for 300$ something they buy 250$...

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Price/Availability

By TomZ on 7/24/2007 1:17:58 PM , Rating: 2

I just checked three e-tailers, with the following results:

newegg.com, in stock, $375
zipzoomfly.com, in stock, $295
mwave.com, in stock, $275

So it only seems like newegg.com deserves some flogging for their price.

RE: Price/Availability

By KristopherKubicki

(blog) on 7/24/2007 1:32:10 PM , Rating: 2

EWiz just took their price down from $330 to $307 -- so good for them.

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RE: Price/Availability

By therealnickdanger on 7/24/2007 1:36:49 PM , Rating: 5

It's almost as if the theory of "Supply and Demand" has weight to it!

That being said, there is a Q6600 in my future.

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RE: Price/Availability

By masher2

(blog) on 7/24/2007 2:13:10 PM , Rating: 2

> "It's almost as if the theory of "Supply and Demand" has weight to it!"

Just so. When demand outstrips supply, there are only 2 possibilities. Either prices rise, or the shelves go empty, and no one can buy at any price.

Well actually there's a third possibility. But I don't think anyone is ready to ask for government-mandated rationing of CPUs yet.

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RE: Price/Availability

By TomZ on 7/24/2007 2:40:12 PM , Rating: 2

The shortage only appears to be at NewEgg, since other e-tailers seem to have sub-$300 pricing. Maybe NewEgg didn't anticipate the demand and didn't order enough units for this week, but I'll bet Intel and its distributors did.

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RE: Price/Availability

By masher2

(blog) on 7/24/2007 3:36:46 PM , Rating: 2

> "The shortage only appears to be at NewEgg, since other e-tailers seem to have sub-$300 pricing."

EWiz is still over $300. Buy.com is under $300...but they're sold out. Directron.com's price is $349 AND they're sold out till next week.

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RE: Price/Availability

By MrBungle on 7/25/2007 12:48:57 PM , Rating: 2

Just a heads-up, eWave has the Q6600 in stock for $279 right now - I just ordered one.

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RE: Price/Availability

By MrBungle on 7/25/2007 12:49:25 PM , Rating: 2

MWave, not eWave, sorry. ;-)

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E4400

By Nick5324 on 7/24/2007 1:40:04 PM , Rating: 2

I realize the quad core Q6600 gets most of the attention regarding this "price cut", but I was waiting on the price cut to pick up an E4400, which was to drop to $113 in 1,000 quantities. I've checked the price of this chip almost every day for the past week, if not a little longer. I should note that I'm looking for a retail box of this CPU, and I was hoping to pick one up this week for around $120.

Newegg has changed the price of the retail E4400 almost everyday. Generally it's only by a few dollars, but it does change often. Yesterday they wanted $127 even, free shipping. Today, they dropped it one cent but tacked on $5.84 in shipping, boo-urns. The highest I think I saw it the past week was $136 shipped. ClubIT, not wanting to be out done, jacked the price up $10, charging $138 vs. yesterday's $128. Zipzoomfly has held strong at their price of $138 shipped, although I haven't seen it in stock until today and their price is the highest. At first glance, Mwave comes through at $119, but I rarely buy from them as they are kings of rip off shipping. True to form, lowest shipping option checks in at $8.64, bringing the price to just shy of $128.

I realize the difference in street price vs. "price cut" price isn't as much as the Q6600, but it still burns my ass. I'm sure the pricing is a result of market demand, not the retailers jacking the price for kicks, but it sucks to hold out for a price cut and watch prices inch up instead.

RE: E4400

By skaaman on 7/25/2007 5:40:38 PM , Rating: 3

I think it's unrealistic to look for 120. To be fair:

1. 113.00 in lots of 1000. Only OEM's and distributors get that price.

2. Distributors markup product.

3. Etailors get from distributors and sell for a small markup (normally anywhere from 3 to 5%)

4. Current costs from four distys are ranging from 123 - 128.

Your looking below disty cost currently.

FWIW...

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RE: E4400

By nemrod on 7/26/2007 2:58:53 PM , Rating: 2

Q6600 was 530$/1000 see the graph above...
or E6600 price history:
http://www.nextag.com/Intel-Core-2-Duo-508428479/p...
minimum around 225$ since april drop (244$/1000)

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good work getting those figures

By Quiksel on 7/24/2007 1:17:04 PM , Rating: 3

but what have we learned here? Are the price-cut announcements good or bad? Honestly, it's hard to say... It sure helps if you're about to build a new box to wait until you could feasibly get a better proc for the same, if not less, money. However, if they are all going to be out of stock, or even worse, back to pre-price-drop price, what's the point?

Here's to more product in the channel at the right price. I guess if you've waited this long for the price drop, you can wait just a little more. :/

~q

RE: good work getting those figures

By Verran on 7/24/2007 1:38:27 PM , Rating: 3

Well I don't see how the point can be made that the cuts are "bad"...

Worst case scenario is they're out of stock for a day or two, and then prices go back to normal. That's not really bad, it's just more of the same. But in all reality, the prices will fall again as more stock comes in. It was just all due to the rush on the first day.

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Intel® Processor Pricing

By crystal clear on 7/25/2007 8:45:45 AM , Rating: 2

quote:
Intel's suggested retail price for the quad-core Q6600 is $266 in quantities of 1,000.

This is for all those interested-

Intel® Processor Pricing
Effective July 22, 2007
1Ku Tray Units

http://www.intel.com/intel/finance/pricelist/proce...

RE: Intel® Processor Pricing

By crystal clear on 7/25/2007 8:59:14 AM , Rating: 2

also-

http://www.intel.com/buy/desktop/boxed-processor/e...

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Price Cuts...

By pauldovi on 7/24/2007 4:13:02 PM , Rating: 2

Perhaps the e-tailers (and distributors) wanted to wait until the price cut to buy their stock of processors. It would suck to buy 10,000 Q6600 @ ~$540 and then the market price is only ~$275...