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Intel Needs to Drop CPU Price to Meet Ultrabook Goal

By - Source: DigiTimes | B 35 comments

PC vendors and manufacturers say that Intel needs to cut CPU prices if it expects them to stay within the sub-$1000 ultrabook price range.

PC vendors and manufacturers are reportedly expressing their concerns about Intel's ultrabook concept and the supposed sub-$1000 price range. The problem, it seems, is that Intel is asking too much for its processors, forcing them to either choose "underpowered" chips or reduce the component specifications to meet the price goal.

According to several reports from DigiTimes, Acer Taiwan president Scott Lin and Compal Electronics president Ray Chen are both asking Intel to provide a subsidy over its CPU prices. If the vendors are forced to choose slower processors or change the system specs, the resulting ultrabook performance will be significantly reduced. Vendors may not be willing to push these sub-par devices thus missing Intel's 40-percent market prediction.

As it stands now, the biggest cost for ultrabook manufacturers is the CPU and the operating system. Next in line are the ultra-thin components like the LCD screen and the solid state drive (SSD). Sources claim that brand vendors are cutting their quotes to notebook ODMs by more than 50-percent to maintain their own profitability because they are unable to reduce component cost.

Unnamed sources have also added that ultrabooks may not catch on despite Intel's push simply because they're 30-percent higher than mainstream notebooks. Students and recent graduates usually grab notebooks priced between $600 and $768 USD, while the working-class citizen typically picks up a notebook for around $830 USD.

Wednesday industry sources pointed out that ultrabooks may still prove to be popular with consumers if they generate good a price/performance ratio and are heavily pushed by both "channel retailers and notebook brand vendors." But if Intel doesn't help manufacturers and vendors by providing subsidies over CPU prices, there might not be much to promote.

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  • 19 Hide
    wintermint , September 22, 2011 1:12 AM
    I thought Intel set aside a fair amount of fund to support ultrabook. I would assume they're providing some sort of subsidy because I'm not going to lie.. Intel CPUs are very expensive.
  • 12 Hide
    dalethepcman , September 22, 2011 1:43 AM
    Intel lost $2B in court for subsidizing its CPU cost's to keep AMD out of certain markets, I don't think they will be doing that again no matter how much the manufacturers complain.

    As to the AMD Troll bait from Octacon, I'll bite. The below information is from Wikipedia. AMD has five mobile quad core Llano APU's that consume 35-45w of power, priced at $109 and up. Intel has seven mobile quad core CPU's that require require 45-55w of power, the starting price is $378. As a point of reference, the slowest mobile chip Intel makes is 1.2Ghz dual core Celeron, priced at $128.

    AMD has quad core laptops for as low as $500, the cheapest Intel quad core laptop is around $800. (google shopping) Your right, AMD needs to make something to compete with Intel.
Other Comments
  • 19 Hide
    wintermint , September 22, 2011 1:12 AM
    I thought Intel set aside a fair amount of fund to support ultrabook. I would assume they're providing some sort of subsidy because I'm not going to lie.. Intel CPUs are very expensive.
  • 8 Hide
    bustapr , September 22, 2011 1:16 AM
    Quote:
    Vendors may not be willing to push these sub-par devices thus missing Intel's 40-percent market prediction.


    40%? if they cost more than $500 they most certainly wont get even close to that. With all the money intel makes a year, I think they can afford to make things cheaper for OEMs.
  • 5 Hide
    JAYDEEJOHN , September 22, 2011 1:40 AM
    Competition is a good thing, lets hope it comes, let the margins fall
  • 12 Hide
    dalethepcman , September 22, 2011 1:43 AM
    Intel lost $2B in court for subsidizing its CPU cost's to keep AMD out of certain markets, I don't think they will be doing that again no matter how much the manufacturers complain.

    As to the AMD Troll bait from Octacon, I'll bite. The below information is from Wikipedia. AMD has five mobile quad core Llano APU's that consume 35-45w of power, priced at $109 and up. Intel has seven mobile quad core CPU's that require require 45-55w of power, the starting price is $378. As a point of reference, the slowest mobile chip Intel makes is 1.2Ghz dual core Celeron, priced at $128.

    AMD has quad core laptops for as low as $500, the cheapest Intel quad core laptop is around $800. (google shopping) Your right, AMD needs to make something to compete with Intel.
  • 6 Hide
    aznshinobi , September 22, 2011 1:49 AM
    I actually think Llano is priced quite competitively, I've seen them in stores as low as $500-$600 and $300 for netbooks. Which is pretty solid considering the Intel laptops coming close to that price offer terrible graphic performance since they usually don't have a dedicated card. Plus they offer pretty decent performance. Also Llano's TDP gives it a fair advantage in both netbook performance and power consumption.
  • -6 Hide
    sonofliberty08 , September 22, 2011 1:52 AM
    wintermintI thought Intel set aside a fair amount of fund to support ultrabook. I would assume they're providing some sort of subsidy because I'm not going to lie.. Intel CPUs are very expensive.

    but the stupid fanboi willing to pay for the expensive cpu that come with crappy gpu inside, just like the crApple fanboi do
  • 8 Hide
    zanny , September 22, 2011 1:59 AM
    dalethepcmanIntel lost $2B in court for subsidizing its CPU cost's to keep AMD out of certain markets, I don't think they will be doing that again no matter how much the manufacturers complain. As to the AMD Troll bait from Octacon, I'll bite. The below information is from Wikipedia. AMD has five mobile quad core Llano APU's that consume 35-45w of power, priced at $109 and up. Intel has seven mobile quad core CPU's that require require 45-55w of power, the starting price is $378. As a point of reference, the slowest mobile chip Intel makes is 1.2Ghz dual core Celeron, priced at $128.AMD has quad core laptops for as low as $500, the cheapest Intel quad core laptop is around $800. (google shopping) Your right, AMD needs to make something to compete with Intel.


    This, most people are thinking of the desktop CPUs that intel has to price for consumers (thus, you get things like the i5 2500k that is amazing price for its performance), its mobile chips have a huge markup because they only bulk sell to laptop manufacturers.

    Maybe if we got a standardized laptop framework and motherboard specification we could have a consumer laptop DYI market :p 
  • 5 Hide
    Darkerson , September 22, 2011 2:38 AM
    If Intel wants this to succeed so much, then they should be willing to make a few concessions themselves. Otherwise, I hope they meet resistance at every angle.
  • 0 Hide
    mikeasaurus , September 22, 2011 4:19 AM
    Wait.... Apple is able to do an "ultrabook" at 1000.00 for their low-end thin & light laptop. With Intel top tier pricing, but that's what other PC manufacturers get too. Am I missing a point? why can't ACER doit?
  • 5 Hide
    digiex , September 22, 2011 5:06 AM
    Use AMD processors.
  • -4 Hide
    DjEaZy , September 22, 2011 5:21 AM
    Intel Needs to Drop CPU Price to Meet Ultrabook Goal? NO!!! Intel need's to discontinue it!!! It is just a expensive MacBook Air copying...
  • 8 Hide
    kyuuketsuki , September 22, 2011 5:21 AM
    digiexUse AMD processors.

    This. I'd totally go for an ultrabook with a good Llano in it.
  • 1 Hide
    CaedenV , September 22, 2011 5:31 AM
    What makes ultra books ultra is the fact that they are a novelty item that few people have. Make them expensive as hell, and very nice. Over price them, and sell them to a few professionals. Let them pay for the development costs, and then when they figure out the manufacturing process, and as demand kicks in then you get the $1000 Ultrabooks after 2-3 years. It simply cant happen out the gate if you want quality.
  • 3 Hide
    mosu , September 22, 2011 6:46 AM
    The prices will go down when AMD chips will kick in the ultrabook market with Trinity APU's, so why all the Intel hype?
  • 1 Hide
    Vladislaus , September 22, 2011 8:00 AM
    mikeasaurusWait.... Apple is able to do an "ultrabook" at 1000.00 for their low-end thin & light laptop. With Intel top tier pricing, but that's what other PC manufacturers get too. Am I missing a point? why can't ACER doit?

    I think that the price listed at least in Europe for acer ultrabook is lower than the macbook air.
  • 0 Hide
    deksman , September 22, 2011 8:15 AM
    Problem with AMD is that adoption in the consumer market (when it comes to the notebook segment) is not exactly stellar.
    Besides, their mobile offerings aren't really that powerful to compete against SB (although to be honest, those who use their laptops for media, internet, office, etc... - general tasks) then Llano is enough for such individuals.

    Though I do think that Intel's pricing is extreme as it is.
    They overcharge too much money for a small bump in speeds.
    I'm sorry but $100 for 0.2 GhZ improvement in speed is way too much.
    Heck, even $100 for 0.4GhZ is not what I would call 'value for money'.

    Intel can overcharge their items because they are in a position to do so.
    If they are meeting resistance, then even better.
    I'm not ready to drop insane amounts of money on a cpu that will deliver marginal performance at best while being priced at premium levels because it has certain features I may never even use.

  • 3 Hide
    HalfHuman , September 22, 2011 9:15 AM
    dalethepcmanIntel lost $2B in court for subsidizing its CPU cost's to keep AMD out of certain markets, I don't think they will be doing that again no matter how much the manufacturers complain.


    Intel did not pay subsidy, but bribed individuals in companies to NOT sell AMD stuff. as a consequence they sold at big price points the magnificent P4 thing. this was not done in the open but rather in the back alley as it was and still is illegal.
  • 2 Hide
    eddieroolz , September 22, 2011 9:30 AM
    I'm having a tough time comprehending this. If Apple, with their markup, can build a MacBook Air for under $1000 then I fail to see how OEMs cannot.

    Unless, Intel is placing a double-standard in terms of CPU pricing, with favors going to Apple.
  • 1 Hide
    americanbrian , September 22, 2011 10:06 AM
    Apple has it's own OS, as stated in the article the OS is the second most costly component of the build.

    That is why Apple can compete on the price of the macbook air.
  • 3 Hide
    Archean , September 22, 2011 11:33 AM
    @american
    Even then the cost of OS has to be factored in overall price. Perhaps it is more like a case of 'production efficiency' ....
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