According to an analyst report, Intel officials are seeing greater pressure from such rivals as AMD and Apple, and need to cut the price of Ultrabooks.
Intel officials may be considering cutting
the price of particular low-power chips in hopes of driving down the cost of
Ultrabooks, which are competing with such devices as Apples MacBook Air,
tablets and new systems coming out powered by processors from Advanced Micro
The move would be the latest effort by Intel
to drive down the price of Ultrabooks, which has been a key challenge for the
chip maker since introducing the very light and thin notebook form factor in
2011. Intel executives initially said they wanted Ultrabooks to come in at
under $1,000 to compete with the MacBook Air. However, tabletswith prices of
many at less than $500continue eating into notebook sales.
At the same time, rival AMD is pushing some
if its new Trinity accelerated processing units (APUs) for low-cost and
low-power notebooks, which officials are calling ultrathins, some of which
they expect to be priced at less than $500.
Systems makers have found it difficult to get
Ultrabook prices to less than $1,000, though a few have come in at about $800.
In addition, OEMs and component makers, citing already-thin margins, have been
reluctant to cut the prices on their products much more to accommodate Intels
Intel has made some efforts to drive down
Ultrabook prices, including creating a $300 million fund to help companies
making hardware and software for the form factor. In June, Intel officials said
they have created a concept
for Ultrabooks that is just as strong as the current
machined aluminum and die-cast metal currently used to make Ultrabooks, and
comes in at a fraction of the cost.
However, until now, Intel has resisted
cutting the prices of its own processors. According to Cody Acree, an analyst
with Williams Financial Group, a report in Chinese newspaper the Commercial Times
indicates that Intel
may cut the price
of one its ultra-low-voltage Core i3 chips by $25 to
$27a reduction of about 11 percent from its current price of $225to lower the
cost of Ultrabooks.
Acree suggested that growing competition from
AMD may have helped precipitate Intels move, noting Hewlett-Packards
introduction of its new
powered by AMD chips, rather than Intel products.
This move has allowed HP to offer Sleekbooks
for $700 versus Ultrabooks at about $1,000, he wrote in a report. Whether the
correct is less important than the pricing trend that we believe is beginning
to become more evident.
AMD over the past few years has not been
tremendously competitive against Intel, Acree wrote. That appears to be
changing with Trinity. When they released the first of the Trinity chips in
May, AMD officials said that while the ultrathin notebooks they were aiming for
might be slightly bigger than the Ultrabooks, they also would cost as much as
$200 less, making them more attractive to mainstream consumers.
Were taking a different tack from Intel,
Leslie Sobon, corporate vice president for desktop product line management at
AMD, told eWEEK
at the time. You should not necessarily have to pay a
premium for thinness.
Intel executives have said that there are
almost two-dozen Ultrabooks on the market now powered by last years
32-nanometer Sandy Bridge Core processors. However, with the rollout of chips
based on the new 22nm Ivy Bridge architecturewhich promises greater
performance and significant energy-efficiency gains over Sandy Bridge
processorsIntel officials have said there are more than 100 Ultrabook designs
in the works and that they expect prices to drop to under $700 this year.
However, despite concerns over pricing, there
is evidence that Ultrabooks are gaining a foothold among notebook buyers. In a June
, market research firm NPD Group noted that Ultrabooks are giving
a much-needed boost to the struggling Windows notebook market, particularly in
the high end, where Ultrabooks now account for 11 percent of sales of Windows
notebooks that cost more than $700.
Overall sales of Windows notebooks fell 17
percent in the first five months of 2012, but the decline was only 3 percent for
those priced at more than $700. Meanwhile, sales of systems costing $900 or
more jumped 39 percent.
Ultrabooks have helped establish a market
for more premium-priced Windows notebooks at retail, Stephen Baker, vice
president of industry analysis at the NPD Group, said in a statement, noting
that because of Ultrabook adoption, sales of $700-plus notebooks accounted for
almost 14 percent of all Windows notebook sales so far this year, compared with
12 percent in 2011. Consumers continue to respond positively to finally being
offered stylish, thinner, and more premium device offerings than ever before
within the Windows ecosystem.