updated 10:35 pm EST, Tue November 29, 2011
Intel ultrabook subsidy, Atom delay may be exposed
Intel is giving Windows-based ultrabook makers a $100 discount to help them try to undercut Apple on price, part suppliers in Taiwan claimed late Tuesday. Designers were getting the "marketing subsidy" in a move that Digitimes understood would lead to prices dropping five to ten percent below the $1,000 mark. The drop would follow an earlier cut expected before the end of 2011 and would presumably come from Intel's $300 million ultrabook fund.
The explanation for the supposed price problem also came with a rare cost breakdown. A typical 13-inch, 128GB SSD ultrabook maker's raw parts cost $690, including as much as a $200 Intel processor, a $150 SSD, and a $50 LCD, among other factors. After rolling in "OEM costs," marketing, and shipping, the system often ended up being $940, leaving very little profit margin, the insiders asserted.
Lopping off the marketing costs would bring that same system to $840 before the profit margin and make $1,000 or less relatively simple. Apple, without that benefit, has sold its own 13-inch MacBook Air at $1,199, albeit often with a faster processor. Companies like Acer and ASUS aren't used to having to use higher-end parts such as aluminum and SSDs as often as Apple and have repeatedly expressed discomfort at being so close in pricing as Apple.
Apple was also creating problems in the netbook arena, a follow-up rumor floated the same day. Intel's delay on Cedar Trail Atom processors has now allegedly come from "competition from tablet PCs," which in the current market is shorthand for the iPad.
Acer and ASUS were still poised to see their netbook sales drop in this view. ASUS wouldn't ship any more than 4.8 million netbooks for all of 2011, and its expectations were now between four million to 4.2 million for 2012. Acer, currently the leader in netbook sales, would fall further as it will have shipped more this year but declined roughly to ASUS' level.
With Samsung possibly quitting netbooks entirely, the category is expected to contract rapidly in 2012 as tablets like the iPad take over. Echoing Acer VP Scott Lin, the sources believed that "emerging markets" like China were still viable but that North America, Europe, and other first-world countries had been marked as all but off limits for netbooks through the iPad and a crop of Android tablets, including those from Acer, ASUS, and Samsung themselves.