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Intel won't halve ultrabook chip prices to undercut Apple

updated 10:55 pm EDT, Mon August 15, 2011

Intel refuses call to cut ultrabook CPU prices

Intel is refusing calls from Windows PC builders to cut chip prices as steeply as they'd like to help them drop prices below Apple's MacBook Air, notebook industry contacts alleged late Monday. The companies had wanted to drop ultra-low voltage Core i5 and i7 prices by half to let them keep profit margins while competing on price. At best, Digitimes heard, the biggest PC designers were getting 20 percent discounts.

The current deals drop the 1.7GHz Core i5 in systems like the MacBook Air and ASUS UX21 to $250. The 1.7GHz Core i7 under the scheme costs $289 and the 1.8GHz top-end model costs $317.

Sources speculated that Intel's hesitance to drop the prices comes from the likelihood that it would lose its much-touted 60 percent gross profit margin, even after the initial rush and compensation from premium priced Xeon chips. A drop wasn't considered realistic no matter what the PC makers wanted.

Demands have been growing increasingly vocal and have led Intel to create a $300 million fund to help subsidize and market ultrabooks, but many of the companies haven't considered this enough. Despite stereotypes, it has been Apple and not its Windows rivals that has had the most cost-effective design in the category as it has been the only one known so far to get a solid-state drive based, full-speed ultraportable down to under $1,000. Most challengers are used to undercutting Apple by using slower or bulkier parts and can't do this with an ultrabook, where thicknesses below 0.8 inches and the need for low-voltage but fast processors dictates higher-quality materials.

ASUS will be the first outside of Apple to meet the ultrabook targets with the UX21 next month, but it should be matched towards the end of this year or early next with systems like the Acer Aspire 3951 and future designs from HP, Lenovo, and others.



By Electronista Staff
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Comments

  1. Bobfozz

    Fresh-Faced Recruit

    Joined: Jul 2008

    +30

    Poor PC Babies...

    How does it feel now that Apple is cheaper than you? What have you got left to sell on?

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +26

    The Wintards always claim

    that all Windows computers have more features for a cheaper price than any Apple computer and that Apple always adds on a $300 Apple tax just for the Apple logo. I guess Windows PC vendors don't think that way anymore.

  1. nowwhatareyoulookingat

    Fresh-Faced Recruit

    Joined: Jul 2009

    +27

    anticompetitive

    Wouldn't it be considered anticompetitive if Intel gave others a huge discount on their processors just to enable them sell products for the same price as Apple?

  1. TomMcIn

    Fresh-Faced Recruit

    Joined: Dec 2001

    +20

    Apple's Share

    How much of the $300 million does Apple get or is this another case where the well run, profitable, innovative companies get to subsidize the slugs?

  1. SockRolid

    Forum Regular

    Joined: Jan 2010

    +15

    Not just laptops either

    ... Most challengers are used to undercutting Apple by using slower or bulkier parts and can't do this with an ultra book...

    Can't do this with an iPad clone either. And just try building your own El Cheapo pad from parts you bought at Fry's...

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    +15

    PC Designers

    Now there's an oxymoron.

  1. SwissMac

    Fresh-Faced Recruit

    Joined: Aug 2006

    +10

    Apple Premium?

    Cheaper chips would be rather pointless since Apple uses the same chips and would also be eligible for the same discount! Those PC builders are clearly too stupid to be called designers, all they do is bolt components together that somebody else designed and moan about Apple being too cheap. lol!

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