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Where is the scam? The consumer is being told what he is buying up front.

The level of power provided at the default level is more than adequate for typical use.

You may not like the idea of an artificial limitation but as with software it makes sense from an economical point of view.

They have been doing this with cpus and video cards for years. There are single core AMD cpus that can be unlocked into dual core cpus with a hack. It often makes economic sense to produce a single die and then place an artificial limitation on it to meet low-end demand without cutting into high-end margins. Sure it would be nice if NVIDIA made one high-end gpu and sold it to everyone for $50 but that would mean far less R&D for future products.

The problem with that argument is that the customer pays more up front for the full featured chip and reaps the benefits immediately. There is no bait-and-switch involving activation codes purchased at almost pure profit. If you're okay with lower performance, you pay less. If you want more performance, you pay more. Either way, you get what you paid for the first time around.

The scam is in the fact that the hardware is deliberately crippled so as to force the customer to pay $50 for what is essentially a string of text in order to unlock what they already paid for once. And, as others have pointed out, this scam is possibly limited to Windows based machines, and perhaps is even a pure software switch so that if you have to reinstall the OS you lose your performance and must shell out another $50 to get it back. I'm sorry, but I'd feel much more comfortable knowing that my hardware's raw performance is not a variable based on a highly volatile software switch.

To put it another way, it's being forced to pay twice (or more) for one physical purchase. It's dirty and underhanded. Didn't Intel follow the Sony debacle?

This is very much dependent on your viewpoint.

Buisness interests will very much like to push the viewpoint that increased sales figures is better for everyone ... they will say "better profit, better returns on investment, more jobs, etc, etc". From this view derives the notion that the price should be set at "the highest price that the market is prepared to pay".

Everyone else, which is the vast majority of people, would naturally have the opposite point of view. It is better for them to lower their costs. From this view derives concepts such as "value for money".

Being a person myself who does not make or sell silicon chips, but rather one who simply uses them, let me tell you that from my point of view (which aligns with the vast majority of people who are also in the category of not being makers of chips) that the second concept, one of "value for money", makes vastly more economic sense than the concept of buying something priced at "the highest price that the market is prepared to pay".

This is especially the case where there is a tendency in a market to believe (against the actual facts) that only one supplier can deliver. For example, there is a belief in this market that only Intel can deliver on "binary compatibility", when in actual fact there are other options from totally different manufacturers who don't deliver binary compatibility at all, but who still deliver far better value for money because the customer didn't actually need binary compatibility.

Edited 2010-09-20 06:36 UTC

"Where is the scam? The consumer is being told what he is buying up front."

Like most PC buyers have any idea about specs? Wait until the Marketing department gets hold of this. The "upgrade" feature will be buried or left out of the advertising. Once they get the PC home and open the box they will be confronted with a friendly little note saying "Get the most out of your PC for only $50!". This is basically only hiding the true cost of the machine in order to have a competitive advantage at time of sale.