Over the past few years, we've been witness to a surprising and somewhat disturbing trend: scarcity in the tech world. Sure, this has always been the case for "prestige" products like the latest iPhone, but this phenomenon has spread to performance products like CPUs and video cards. It first became evident in September 2014, when Nvidia launched its unrivaled Maxwell generation of GPUs, and we saw it again as Intel 's Broadwell desktop processors were announced but failed to get off the ground in 2014, and then had an aborted launch in 2015. And in 2016 we're seeing it again in what is perhaps the biggest development in desktop computing in years, the move to 16nm and 14nm lithography for graphics processing units from Nvidia and AMD, respectively. And why is this all so disturbing? Can't we just wait for the good things in life?
Well, in a word, it distorts the market. What we've seen over the past two years of scarcity upon the release of hot new products is price increases, reduced value for dollar, along with a nearly complete halt in CPU and GPU sales for months at a time, as consumers in the know await their chance to score the next big thing. This is bad for consumers, bad for retailers, and in the end, bad for manufacturers as well, even if they don't realize it. Because in the end, consumers are sometimes left paying more for a given level of performance than they would have with older gear, just for the sake of having the newest products. And this makes hot, new, innovative products look stale right out of the gate. Take Intel's Skylake family of processors, launched in August 2015, after the aborted launch of Broadwell. Skylake offered performance about 10% better than 2013's Haswell (and 5% better than Broadwell), but came with such levels of consumer anticipation that the top-performing Core i5-6600K and Core i7-6700K were out of stock for months, often selling for $100 over retail prices due to the activity of scalpers. These ever-present individuals, and sometimes grey market retailers, scoop up one or two products at a time for retail prices and then offer them for sale at hundreds of dollars above MSRP on Amazon or eBay, to take advantage of all the enthusiasts who must have the best but can't be bothered to look for it themselves. Scalpers, after all, are buying these products from exactly the same stores all of us can buy them at, the difference being that they're spending all their time online searching for the few product samples that make it to retail every day.
And both Intel and Nvidia want a piece of that action. With its new Broadwell-E enthusiast-class CPUs, Intel took the bold step of increasing prices 10% above what Haswell-E processors had sold for earlier this year, despite offering only 5-8% more performance. That, dear friends, is a step backwards in our book. Nvidia at least stuck with the age-old concept of offering more performance per dollar, but its hot new product, the GTX 1080, which offered 30% more performance than its previous high-end champ, the GTX 980 Ti, was released with an 8% price hike. So while not quite as bad as Intel, Nvidia's latest strategy is most definitely a move in the wrong direction.
And let's be frank, while enthusiasts and critics can deride Intel, Nvidia, and the parasites who feed off their scarce products for jacking up prices, the ones really being hurt are consumers. But there's always perennial underdog and folk hero AMD to come and save the day, right? Well, it can try, but it will almost always fail. Its groundbreaking Radeon RX 480 4GB video card was supposed to turn the mid-range gaming market on its head, offering $400 worth of performance for under $200. And sure, it "launched" its $199 RX 480 4GB product on June 29th, only to see it sell out in hours. And then came news that these 4GB cards were in fact 8GB cards in disguise, because AMD couldn't actually source the low-cost memory chips that were necessary to produce its $200 pace setter. That meant AMD was taking a bath on these cards, and in the end meant that the more expensive RX 480 8GB, which retails for $240, was going to be the focus of AMD's attenton. But it gets worse, because of course the scalpers got involved when AMD couldn't actually keep up with demand. Suddenly these value leaders were selling for over $300, meaning they actually offered less bang for the buck than the now-discounted GTX 970 and R9 390 that had been on the market for years!
Of course, all this nonsense begs the question: why can't Intel, Nvidia, and AMD actually produce new products in decent quantities? Are they so groundbreaking, so incredibly advanced, so space age that they must hit the market a box-full at a time? Well, they may be difficult to produce (Nvidia claimed that it invested upwards of $2 billion to bring its new Pascal-based GPUs to market), but shouldn't these companies be able to build up a decent inventory in advance of launch? They are barely even competing with each other anymore, as was the case ten years ago, when every AMD processor could go toe-to-toe with Intel processors, and every AMD GPU had at least a chance of being top dog for a while. In today's market, there's simply no excuse for Intel and Nvidia in particular to launch products before they can deliver them.
And while consumers likely can't change the ways of Intel and Nvidia, we bet retailers eventually will. The last thing they want is for months of last-gen inventory to go unpurchased as everyone waits for next-gen products to actually become available in quantity. The Amazons, Neweggs, and Microcenters of the world don't like offering big discounts on products consumers no longer want, especially when they have no other inventory to sell. While we don't have sales data for these companies, we do have some insights into what our readers are buying right now, and we can guarantee you that far more video cards were selling in the run up to the GTX 1080 launch than are selling right now. And that's just backwards, pure and simple.
So while Intel and Nvidia have certainly learned how to generate some of the hype that Apple has enjoyed for years, they still have a lot to learn. Because Apple, after all, sold 13 million units of the iPhone 6S during its launch week, a number Intel and Nvidia simply can't hope to touch anytime soon.