The problem is that if these extras are so cheap that Intel figures they can afford to put them in every CPU even if only a few people buy them, then there's clearly a large disparity between the cost to produce the feature and the current market price for it. Long-term, this typically happens when there's a distinct lack of competition and a natural monopoly is arising. Normally, competition will drive the market price for features down to a small percentage above their cost to produce.
I'm pretty pro-free market and have eaten my share of down-ratings here for it. But that Intel is considering something like this is a pretty big warning sign that the free market isn't working as it should in this market.
You don't understand economics.
Just because a product has a low marginal cost does not mean their is a monopoly at play. The high upfront and fixed costs need to be recovered in order to break even. A zero-profit margin business could still have low marginal costs of sales and high revenue.
That's not to say this industry doesn't have high barriers to entry through IP and the huge industrial infrastructure necessary to support the business. However. the latter at least is a natural monopoly due to the economics of the business and not something that can or should be legislated away.
Slashdot Mirror
The problem is that if these extras are so cheap that Intel figures they can afford to put them in every CPU even if only a few people buy them, then there's clearly a large disparity between the cost to produce the feature and the current market price for it. Long-term, this typically happens when there's a distinct lack of competition and a natural monopoly is arising. Normally, competition will drive the market price for features down to a small percentage above their cost to produce. I'm pretty pro-free market and have eaten my share of down-ratings here for it. But that Intel is considering something like this is a pretty big warning sign that the free market isn't working as it should in this market.
You don't understand economics. Just because a product has a low marginal cost does not mean their is a monopoly at play. The high upfront and fixed costs need to be recovered in order to break even. A zero-profit margin business could still have low marginal costs of sales and high revenue. That's not to say this industry doesn't have high barriers to entry through IP and the huge industrial infrastructure necessary to support the business. However. the latter at least is a natural monopoly due to the economics of the business and not something that can or should be legislated away.