Intel Corporation's High-End Desktop Lineup Could Use an Early 2017 Refresh

By Markets Fool.com

Microprocessor giant Intel (NASDAQ: INTC) develops two parallel desktop processor lines. The first is what the company refers to as its "mainstream" processors: These typically have between two and four processor cores as well as integrated graphics technology. They're derived from chips that go into notebook computers.

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Image source: Intel.

The second is what the company calls high-end desktop processors (HEDT). These chips have between six and 10 processor cores, no built-in graphics, and are derived from the company's server processor lineup. They're generally much more expensive than even the fastest mainstream processors.

Back in May, Intel refreshed its high-end desktop product line with a family of chips known as Broadwell-E, replacing the prior-generation Haswell-E series of chips. Broadwell-E's main claim to fame is that with this generation, Intel released a 10-core variant (the first 10-core consumer desktop processor in the industry) for an eye-popping $1,723.

Although the company released the first Broadwell-E processors in May, the reality is that the successors to those Broadwell-E parts -- known as Skylake-X -- aren't expected to arrive until the fourth quarter of 2017.

Due to that delay (old leaked road maps showed a much more aggressive schedule for Skylake-X), Intel would do well to refresh the current Broadwell-E parts in early 2017.

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Higher out-of-the-box speeds could be enough

Although Intel can bring out new Broadwell-E processors with increased core counts by simply rebadging a server/workstation part and calling it a day, this doesn't seem a likely course of action on Intel's part.

Instead, what the company could do is bump up the frequencies at which the current variants run to boost customer interest in the product lineup. If Intel can increase base and turbo-boost frequencies for these parts by around 200 MHz across the board, then that could keep customers interested.

Here's what the potential lineup could look like:

Metric

Core i7 6820K

Core i7 6870K

Core i7 6920K

Core i7 6970X

Cores/threads

6/12

6/12

8/16

10/20

Base/boost frequency

3.6 GHz/3.8 GHz

3.8 GHz/4.0 GHz

3.4 GHz/3.9 GHz

3.2 GHz/3.7 GHz

More cores could work well, too

A speed bump in the form of the proposed product line above could help bump demand up some, but if Intel wanted to get even more aggressive, it could -- in addition to the speed boosts -- introduce a higher core count model at the very top of the stack.

Introducing such a part would be extremely simple -- trivial, in fact. All the company would need to do is to take the workstation-oriented chip known as the Xeon E5 2687W, unlock the multiplier (to allow users to manually adjust the chip's clock speed beyond the rated specification), and sell it as, say, a Core i7 6990X.

The 2687W sells for around $2,145, so Intel could probably get away with charging approximately $2,300 for a potential 6990X (the extra $165 seems like a fair trade for the ability to adjust the chip to run at higher speeds). This pricing would be quite steep for a consumer-grade processor, but considering that Intel reported seeing better-than-expected demand for the $1,723 6950X, a $2,300 6990X is still probably worth making.

Not only would introducing an even higher-end, higher-core count model potentially spur demand (buyers of the 10-core are probably the same people who would be interested in upgrading again to a 12-core chip), but it could also lift Intel's desktop processor average selling prices as well.

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Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.