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.