I've used similar parts, like bluetooth transceivers, where there are two SKUs: one is a cheaper commodity part and comes with built-in firmware.

The other more expensive part allows for modifiable firmware (and, thus, exposes the processor inside). My cynical POV is that the chipmaker knows they'll be spending more internally on SDK development/support and field rep time. So that needs to be recaptured in the cost of the part.

Likely cheaper to manufacture a single chip and do market segmentation via software than manufacture two if the savings are measly (let’s assume 16nm process) 1/500 mm^2 per chip.

But you're right about the rest. The segmentation is achieved with fuses and firmware.

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I don't even see the cynicism. But, in any case, most people would probably consider the standard business school price finding advice to be more cynical: costs are a lower limit only. Beyond that, only the customer's willingness to pay is relevant.

Airline fares are good examples, or any of the food products being sold branded as well as unbranded/store-brand/generic/white label versions.

I don't think NCR really recovered till the NCR 7878 came out, setting the bar for a robust scale/scanner

My old employer is prepping for the shift with their software vendor currently, should allow for a much longer period of support & remote debugging...

However, there's another view of fairness (or maybe just a desirable feature of the markey). It should be possible for a customer to purchase only the features required to meet their requirements, and that they should be able to spend less money on less features.

Those two views of fairness can be in contradiction with each other.

The ability of a company to be able to provide a family of products at a variety of feature and price points cheaply is aided by their ability to do software based control of features. Use of a single physical platform reduces cost (which aids the final customer). If a company had to price everything at a single feature/price point, the average customer will see an increase in price to pay for features they do not want.

Anyhow, that's the argument. Still feels icky though.

The alternative is to design a car with a smaller battery pack. This would mean additional design work, and less efficiencies of scale. This would make the cost of both tiers of car go up.

The way this is phrased it's just differing margins for the same physical good and no additional cost for the manufacturer to justify a higher price. (Not sure if this is an accurate assessment, but that is what I get from the comment.)

Suppose that once r&d is considered, two chips (single/dual core) cost roughly the same to manufacture.

I could sell everyone the 2 core processor and say sorry to customers needing less, you have to pay full price. Or I could maximize the market I can sell to, and offer the same product with a burned out pin that locks out the second core. Or even better, sell everyone a soft upgradable 1 core, so you buy the entry level product, and when/if you need it, you can buy into the upmarket model.

But the important part here is: ignoring r&d. Yes, the hardware I'm selling you could do more, but you're subsidizing fewer engineers, so you only get access to their efforts, not every effort my company has ever produced.

This part:

> Or even better, sell everyone a soft upgradable 1 core, so you buy the entry level product, and when/if you need it, you can buy into the upmarket model

... is still one that I would have trouble with, were I the manufacturer. I would be inclined to throw away profits on high end sales and price them all low for these scenarios, based on my desire to be fair to the customer and not run the thing like a casino with physically dubious upsells for what they already purchased. Yes you read that right. This is one reason why I am not in a position to be running Intel.

Are software companies allowed to charge a price for their free-to-produce products at all?

If they are, how would you justify that?

And why would that justification not apply to CPU vendors, if they’d label their hardware as freebies where you’re just paying for a perpetual license?

> Also, as you seem to acknowledge, when you purchase software, you are technically acquiring a license.

That's really just semantics.

When you buy a mainframe with some CPUs disabled, you're not only buying the hardware, you're also buying a license for the OS, which includes the ability to use a certain number of CPUs of the machine.

You're commenting earlier that you'd price the higher SKU the same as the lower SKU, but I think it's just as likely that you'd simply not make a higher SKU because there'd be no extra profit in doing so.

It may seem perverse that hardware is being sold with capabilities deliberately crippled, but doing so if often one of the only ways to justify developing these higher SKU capabilities to begin with. This kind of product differentiation makes it possible for customers to buy a higher SKUs that otherwise simply wouldn't exist.

This, I think, is the crux of the matter.

Yes, they could just offer one model, at a price point somewhere between the two different models. However, now some customers who were happy with the lower-end model are priced entirely out of the market, which is bad both for those customers and the seller. Balancing that, customers for the higher-end version have paid less (good for them) and some new customers will have entered the market because the new features/price-point is attractive to them (good for them and the seller).

It's not obvious which of these will dominate (so whether everyone is net better off or not), but in the absence of any hard data relying on the self-interest of the seller to maximise their own benefit seems reasonable here.

On the other hand, if everything came out good, then the manufacturer sells the part as the high-end product.

AMD CPUs, especially the 3-core parts, were often unlockable by re-enabling the disabled cores in BIOS. Lucky buyers could get 4 cores for the price of 3.

A strange accusation without proof.

Fair warning I can't open the Tweet, Twitter is blocking me... or maybe I uBlock them? so I'm making a statement in similar unsupported ignorance.