AMD fans the flames with Barcelona pricing

AMD's Barcelona Opteron pricing sneaks out

The drumbeat for Barcelona is getting louder and louder. Advanced Micro Devices is widely expected to launch the new processor on Sept. 10—next Tuesday—at speeds of up to 2GHz in a number of cities across the world, including San Francisco and Barcelona, of course (link: here). AMD has confirmed that the quad-core processor has begun shipping for revenue (link: here), meaning customers are purchasing it in order to build inventories before launching products.

Now reports are saying AMD has communicated Barcelona pricing to its partners. DailyTech (link: here) is reporting that Opteron/Barcelona 2300 series processors will start at a list price of $206, while Barcelona 8300 series processors will start at $688.

If those prices seem a little low, that’s because they are. But AMD is not intentionally discounting the pricing of the Barcelona chips discussed by DailyTech. Instead, what the chipmaker is doing is leaving room for the introduction of faster and thus higher model number processors later this year and into 2008. Taking a closer look, the $206 list price of the entry-level 1.7GHz Opteron model 2344 HE, cited by DailyTech, carries a $32 or roughly 15% premium over the current entry-level dual-core Opteron HE model 2210, which lists for $174 on AMD’s site, and runs at 1.8GHz.

If the premium--say 15%, using my one example--seems small, it’s actually not. Due to competition between them, AMD and Intel often introduce new generations of processors at prices that are no more than current-generation processors. AMD did so when it introduced its second generation of dual-core Opterons. The fact that AMD will ask for more for Barcelona Opteron, and presumably its Phenom chips as well, underscores its confidence in the processors' performance. AMD, which has been struggling financially during 2007, could use a pricing bump. Although AMD's third-quarter Barcelona shipments are likely to be small in numbers, the chip could influence the chipmaker's fortunes in the fourth quarter, for which it has said it aims to report a profit.