Monday, January 31, 2011

Intel finds flaw

On January 9th of this year(2011) Intel released its second generation of the i series processors, with Sandy Bridge micro-architecture. With the introduction of these new 32nm processors a new chipset was required to make them work, and being there are no third party chipsets that are compatible with the Sandy Bridge editions of the i3s i5s or i7s the only viable option is what is referred to as "Cougar Point" inside Intel. With these chipsets  a major flaw has been discovered, it has to due with the Serial ATA ports in your computer which typically connect your hard drive to your mother board. This defect has halted production and caused a billion dollar recall.
The problem that's caused Intel to initiate a billion-dollar chipset recall affects the SATA ports on all 6-series chipsets, including the H67 and P67 chipsets most prominently used in consumer products. All of these chipsets are collectively referred to as "Cougar Point" inside of Intel. Because there are no third-party chipsets compatible with Sandy Bridge processors, all Sandy Bridge-based systems are potentially affected, including desktops, laptops, and DIY motherboards. 

 Beside the obvious inconvenience and bad PR, this little slip-up will cost Intel quite a bit of money, too. The firm expects to see a $300-million dent in first-quarter revenue (since full volume production of 6-series chipsets won't resume until April), not to mention $700 million in total repair and replacement costs.
With the need for such a major recall Intel is going to lose over a billion dollars in a new chipset, replacing the recalled chipsets, and repairing damage to mother boards and other computer components of the unsuspecting consumers who went out and purchased the new generation of six core processors. This overall will stain the companies image and reliability which will cause a massive drop in sales and a inversely proportional rise in the sales of companies such as AMD. With this change in consumer consumption Intel's first quarter profits for the year will either be extremely low or will even report a loss. Also this puts extra pressure on the company's consumers. Not only do they have to worry about getting their computers in for the recall, they must also worry about replacing them. Most likely causing a almost complete rebuild of their system. Intel's failure to notice this problem during testing could also be related toward the Microsoft Windows Vista failure a year or so back. This just further proves why it is crucial for companies to beta test their products for an extended period of time when working in unfamiliar territories such as 32nm architecture. Yes it will cost them more money up front, but it removes the potential of billion dollar recalls which are detrimental to a company.

6 comments:

Kern said...

As a business owner, why would you not want to beta test for a longer time to reduce mistakes?

Will this affect other products other than AMD and Intel?

Why will AMD see and increase in sales?

Smith said...

This is a great analysis. I completely agree with your idea about longer beta testing periods. However, how long would be "acceptable" by the public and business owners? How long do they beta test now?

Matthew said...

At current Beta testing differs from company to company and product to product. Companies tend to use short beta periods because for each day/week/year that a company tests a product there is a chance another company will release the same product, a chance a new technology might be developed, and a guarantee the cost of production will rise. For those reasons someone such as a business owner would rather use a shorter beta test period. However with ventures in new technology and fields that have never been dealt with before there is a larger risk, I feel that this larger risk warrants a longer testing phase to try to prevent a defect getting through or having to have a major recall.

Yes this flaw will effect more then the products of just AMD and Intel, I will point to a quote inside my post "all Sandy Bridge-based systems are potentially affected, including desktops, laptops, and DIY motherboards." So not only these two companies that deal with processors but the companies using them will notice a change in sales. Either a switch to older technology or a rise in sales of Intel's competitor AMD, which is known for taking extremely long testing periods and always releasing stable products for cheaper then an Intel being that the delay causes the value of the hardware to degrade.

kern said...

As a consumer are you willing to wait for longer beta testing or are you willing to take the chance and buy a product that essentially is still in beta?

I think most early adopters except the fact that the product may not yet be perfect. As a person who bought the first generation of the iPhone and iPad, I new very well that the next generation would be better and that I would go through some growing pains with the product. But as Zach says in his post over in group 5, usually the first to the market has a significant advantage and thus they have to fished out the cost-benefit of a loss in demand versus a buggy product or recalls.

Matthew said...

with that said I will point to what happened with Microsoft and Windows Vista. The operating system was released after on a two setup beta process that each lasted around 2 months. With this product there was a big hype and rise in initial sales then problems started to appear, spontaneous blue screens and other software and hardware issues and ended up with Vista being the first Beta to the rushed out the door windows 7. Grant it there was no recall for this yet there was massive amount of updates and patches released regularly and this is easy to do with things mostly based on the software not hardware. You see the difference between things such as a 32nm processor and the iPod and iPad is that the technology already existed and had been tested and proven, the updates for the most part have been software and minor hardware tweaks. What I was stating is that ventures into areas that have never been dealt with before should have extended beta periods. Yes there are always fan boys and such type people that will over look all of these potential problems and jump out of the gates to buy such a product and will either be happy or the product will be really buggy and might cause the consumer to change what companies they trust. This whole beta test versus early release is just a gamble, a chance on making millions or loosing billions.

Garrett T. said...

I'm surprised Intel didn't find out the flaw during the beta test. Well I guess it can't be helped, as long as they learn from the mistake they'll save resources I guess in the long run. If it were me, I'd rather have perfect or near perfect machine than one that is flawed because the company was to hasty in their release. There are some things worth waiting for.