Intel's (NASDAQ: INTC) Core i7-7700K is the best-selling desktop personal-computer processor on both Amazon.com and popular computer-hardware vendor Newegg.com. The chip sells for between $330 and $340, depending on the vendor, which is likely well above the company's overall personal-computer processor average selling price.
Although the Core i7-7700K, as well as its cheaper counterpart, the Core i5-7600K -- which is the third-best-selling desktop processor on Amazon.com and the second-best-selling processor on Newegg.com -- are quite popular and command solid average selling prices, I think Intel has an opportunity with its next-generation processor family -- code-named Coffee Lake -- to boost its desktop-processor average selling prices.
Six-core segmentation strategy
The 7700K is a four-core/eight-thread processor, while the 7600K is a four-core/four-thread chip. Intel's upcoming Coffee Lake desktop processors are expected to come in two-, four-, and six-core configurations.
Intel could conceivably offer more processor cores at each price point in a bid to improve the value proposition of its desktop processors across the board. For example, the Core i7 7700K could be replaced by a six-core/12-thread part at the same $330-$340 price point, and the Core i5-7600K could be replaced by a four-core/eight-thread part at its $230-$240 price point.
However, Intel could offer more value to customers while also getting paid more for the additional silicon that it'll be selling with its Coffee Lake chips. (The move from a four-core chip to a six-core chip is expected to lead to a roughly 20% increase in chip size, per a leak from the generally reliable BenchLife.info.)
Here's what Intel could potentially do, then. It could offer the four-core/eight-thread Coffee Lake part at the same price point that it currently sells the four-core/four-thread Kaby Lake part. This would represent an increase in value for the money to the consumer, since more threads and potentially higher out-of-the-box frequencies could be a win here, as well as just a nice generational increase.
Then, at the $330-$340 price point, Intel could offer a six-core/six-thread processor. Intel would be regressing on logical cores at the $330-$340 price point, but the additional physical cores, coupled with, perhaps, some aggressive frequencies, could make it a compelling product at that price point.
Then, finally, Intel could introduce a full-fat six-core/12-thread processor at a new price point for the company's mainstream desktop processor offerings -- say, at $369.
I suspect that a lot of gamers/enthusiasts, the target market for such chips, would be willing to pay $20-$40 extra for the additional six threads on such a part. This move, then, could lead to a slight -- but potentially noticeable -- boost in the company's average selling prices for these gamer/enthusiast processors on its mainstream platform.
The company is expected to launch the first Coffee Lake-based desktop processors for the gaming/enthusiast market in either August or September, based on recent leaks, so it won't be too long before we see what Intel has chosen to do with respect to product configurations and pricing.
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