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Report: Intel to Pay for $100 of Your New Ultrabook [UPD]

By - Source: DigiTimes | B 36 comments

Ultrabook prices will begin to fall next quarter partially thanks to a $100 subsidy finally offered by Intel.

Intel has reportedly heard the plea of ultrabook manufacturers, and will supposedly offer a $100 marketing subsidy. Acer, Asustek Computer and Toshiba were already gearing up to lower ultrabook prices by the end of the year, but the subsidy will now allow them to drop prices an extra 5 to 10-percent in the first quarter of 2012.

Ultrabook manufacturers have complained for some time that it will be difficult to keep prices under Intel's requested $1000 price cap. According to sources, the BOM (bill-of-materials) for a 13-inch ultrabook equipped with an SSD is estimated at $690 USD. Throw in OEM costs at $100, marketing/distribution costs at $150, and the device ends up costing an overall $940 USD.

Obviously there's really no room for profit without pushing the retail price beyond the $1000 point. The CPU itself costs manufacturers around $175 to 200 USD, the 128 GB SSD around $140 to 150 USD, and the LCD panel $45 to 50 USD. Intel's $100 subsidy may not seem like much at the end of the day, but at least it's something.

As reported earlier, ultrabook manufacturers plan to cut costs by using cheaper materials such as replacing the magnesium alloy chassis for one made of fiberglass. The chassis may also switch from a unibody design to a cheaper hybrid design using aluminum on the outside but plastic parts on the inside. There's even been talk about using hybrid hard drives so that ultrabooks can supply the capacity of a hard drive and the speed of an SSD while keeping the cost somewhat reasonable.

Recent reports have indicated that up to 50 ultrabooks are scheduled to make an appearance at CES 2012 in January. These will be presented by Lenovo, Hewlett-Packard, Toshiba, Dell and others.

UPDATE

We just spoke directly to Intel and were told flat out that no such $100 subsidy will exist for ultrabook manufacturers. That's not to say that prices of ultrabooks won't be coming down in 2012--but if they do, it'll be from improvements and innovations in design rather than from Intel's pocketbook.

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  • 24 Hide
    willard , December 1, 2011 2:47 AM
    ragenalienAs a salesman I can honestly say that everyday people will not buy these. Most people who come into a store looking for a computer go strait for the 300-400 dollar price point. They'll see these computers vs. a macbook air and ask me what the difference is. The difference is (for whoever doesn't know) that the airs are made with better parts, they come with more software (aka mac stuff), they have a better battery life, and they have an overall better build quality all for a similar price.

    As a person who actually knows a thing or two about computers, I can honestly say you don't. Apple components aren't magically better because Apple has stamped them with their seal of approval. In fact, many of the parts are literally identical to non-Apple counterparts, they've just been digitally signed by Apple.

    In some areas, components are actually inferior to what you can get on a Windows machine (particularly, video cards) because Apple sometimes lags behind a generation on adopting the new hardware. It's actually pretty rare for Apple to offer new hardware before retailers like Dell or DIY builders can get their hands on it for a Windows build.

    And Apple computers are most certainly not a similar price, with the exception of the ultrabooks. The phrase "Apple Tax" exists for a reason, and that reason isn't because Apple hardware is similarly priced.
  • 16 Hide
    aodknifer , December 1, 2011 1:22 AM
    bout time Intel realized that they are the reason manufacturers have trouble staying under that 1,000 dollar ceiling.
  • 13 Hide
    AznCracker , December 1, 2011 2:02 AM
    I would like to retract my previous statement. The Mac Book Air is $400 dollars more with the same specs. what a shiny pos
Other Comments
  • 16 Hide
    aodknifer , December 1, 2011 1:22 AM
    bout time Intel realized that they are the reason manufacturers have trouble staying under that 1,000 dollar ceiling.
  • 5 Hide
    Kaiser_25 , December 1, 2011 1:27 AM
    I love hearing people complain about the costs of logic chips, and most everyone of them has no idea what goes into the manufacturing of them, 200$ for a chip really isn’t unreasonable, and noone is forcing you to buy the flagship 1000$ chips
  • 1 Hide
    drfan , December 1, 2011 1:33 AM
    That $100 could make a huge difference. It would encourage more manufacturers to jump to ultrabook wagon thus drive the price down even futher due to the benefit of economy of scale.
  • 12 Hide
    brickman , December 1, 2011 1:53 AM
    mean that their CPUs are $100 more :D 
  • -3 Hide
    brickman , December 1, 2011 1:53 AM
    *means
  • -2 Hide
    Supermuncher85 , December 1, 2011 1:56 AM
    Awesome " replacing the magnesium alloy chassis for one made of fiberglass". News in 3 months time: New Foxconn workers died due to insufficient health and safety regulations after switching production to fiberglass.
  • 13 Hide
    AznCracker , December 1, 2011 2:02 AM
    I would like to retract my previous statement. The Mac Book Air is $400 dollars more with the same specs. what a shiny pos
  • -1 Hide
    ojas , December 1, 2011 2:19 AM
    I doubt it matters to Intel, they keep 65% profit margins anyway...
  • 24 Hide
    willard , December 1, 2011 2:47 AM
    ragenalienAs a salesman I can honestly say that everyday people will not buy these. Most people who come into a store looking for a computer go strait for the 300-400 dollar price point. They'll see these computers vs. a macbook air and ask me what the difference is. The difference is (for whoever doesn't know) that the airs are made with better parts, they come with more software (aka mac stuff), they have a better battery life, and they have an overall better build quality all for a similar price.

    As a person who actually knows a thing or two about computers, I can honestly say you don't. Apple components aren't magically better because Apple has stamped them with their seal of approval. In fact, many of the parts are literally identical to non-Apple counterparts, they've just been digitally signed by Apple.

    In some areas, components are actually inferior to what you can get on a Windows machine (particularly, video cards) because Apple sometimes lags behind a generation on adopting the new hardware. It's actually pretty rare for Apple to offer new hardware before retailers like Dell or DIY builders can get their hands on it for a Windows build.

    And Apple computers are most certainly not a similar price, with the exception of the ultrabooks. The phrase "Apple Tax" exists for a reason, and that reason isn't because Apple hardware is similarly priced.
  • -5 Hide
    livebriand , December 1, 2011 3:05 AM
    How can Intel afford to do that, given the prices of their CPUs?
  • -3 Hide
    nebun , December 1, 2011 3:05 AM
    wow cheap materials....thanks but no thanks
  • 1 Hide
    Anonymous , December 1, 2011 3:08 AM
    The difference is (for whoever doesn't know) that the airs are made with better parts, they come with more software (aka mac stuff), they have a better battery life, and they have an overall better build quality all for a similar price.

    spoken like a true apple "genius" and i use the term genius loosely....The airs are not made with better parts at all infact the only manufacturer to produce everything in house is samsung...Apple source most of there gear externally and as willard posted stamp it with a little half eaten apple and call it theres...

    "As a salesman I can honestly say that everyday people will not buy these"

    I can see your speaking for every consumer on the market....nice to see your actually talking about the benefits of an ultrabook to a customer as opposed to get that quick sale to boost your commission...ultrabooks are a great category for the PC market. It finally has something to upstage the macbook air muppets and bring some attention back to ever decreasing pc sales...

    but as a salesperson i wouldnt expect you to know this.

    "As a person who actually knows a thing or two about computers, I can honestly say you don't"

    LOL
  • 5 Hide
    dtemple , December 1, 2011 3:23 AM
    ragenalienAs a salesman I can honestly say that everyday people will not buy these. Most people who come into a store looking for a computer go strait for the 300-400 dollar price point. They'll see these computers vs. a macbook air and ask me what the difference is. The difference is (for whoever doesn't know) that the airs are made with better parts, they come with more software (aka mac stuff), they have a better battery life, and they have an overall better build quality all for a similar price.

    I really hope you don't work for Best Buy. I do, and I would hope someone who makes those kinds of generalizations is not a coworker of mine.
    Most people who come into the store looking for a computer are just that... looking for a computer. You don't know if they want an ultrabook or a mac or a desktop or a PC laptop or a tablet until you talk to the customer and ask them their intended uses. You have to figure out what they want the device to do for them. Macbook Air isn't made with better parts. The chassis is very sturdy, I'll give it that - the screen has less flex than a lot of the Ultrabooks do. But honestly you're paying extra for it being an Apple, in order to have their support. If you have a question or a problem with your Mac they tend to be very helpful at an Apple store, and that along with the better chassis and the easier-to-use interface for first-time computer users and computer illiterate people, those are the reasons a Macbook Air would be worth the extra expense.
    Ultrabooks are great for people who are familiar with Windows and want to continue using it, who want something that will perform very well but be extremely light, and want a very long battery life.
  • 1 Hide
    alidan , December 1, 2011 3:55 AM
    Kaiser_25I love hearing people complain about the costs of logic chips, and most everyone of them has no idea what goes into the manufacturing of them, 200$ for a chip really isn’t unreasonable, and noone is forcing you to buy the flagship 1000$ chips


    ok, a 300mm wafer has 70685.8mm to work with
    here are numbers from wiki
    2 core - 139-141mm
    4 core - 216
    lga 2011 - 435

    lets not go into all the numbers and variables, and just look at these facts i have heard in the past, and also not worry about chip placement, also assume that 100% work, 50% work, and 25% work, and finally 10%

    i have heard that from start to finish a wafer costs 50000$

    508-501 = 98$ - 99$ a chip
    327 = 152$ a chip
    162 = 308$ a chip

    thats the base cost of manufacturing from wafer to cpu, not including r&d and not including the fab plants.

    r&d costs about 1billion per architecture, fab plants cost about 2-3 billion but this was 45nm when i knew about this cost.

    on that note, bulldozer has 223 chips and 224$ per chip
  • -6 Hide
    Anonymous , December 1, 2011 4:24 AM
    Stop whining. First of all, it's tough creating a new company and a new product, hence why you losers don't have a company, and will never create anything of your own. I create a company, my company, to make a profit. That is the whole point, to make a product, and to make a profit, and then to spend that profit on what you believe is right, research or whatever. It's not a charity, its a business. Without people like me, you losers would still be in caves, using stone tools... most likely in your parent's caves, drawing on walls, pretending that you're hunting mammoths, instead of real men who are hunting mammoths (in other words, you gamers are pimple faced losers, living with your parents, and have zero to contribute to society, and all you do is whine like women).
  • -1 Hide
    stevenrix , December 1, 2011 4:24 AM
    *yawn* time to go to bed; I'll never buy an ultra-book.
  • 1 Hide
    de5_Roy , December 1, 2011 4:33 AM
    Quote:
    Ultrabook prices will begin to fall next quarter partially thanks to a $100 subsidy finally offered by Intel.

    thank you intel!
    but you could do even better by not jacking up cpu prices not so high in the first place!
  • 3 Hide
    martel80 , December 1, 2011 4:58 AM
    Gorodon1
    Please... While I agree with that business part, I'm a weekend gamer myself and I'm not anything you described.

    I don't run a company - I would likely have no weekends then and no time for gaming. :) 
    I'm a regular but loyal and hard-working employee and you should realize that without people like me, your company would be screwed (in case you're not a one-man "company").
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