Outfoxed by Apple, PC Makers Again Try to Get Intel to Cut “Ultrabook” Chip Price

Outfoxed by Apple, PC Makers Again Try to Get Intel to Cut “Ultrabook” Chip Price

PC makers hoping to compete with Apple’s lightweight MacBook Air laptop want chipmaking giant Intel to cut prices in order to produce “Ultrabook” alternatives costing under $1,000. So far, the company has balked at any discounts, yet still seeks to capture 40 percent of the notebook market.

Acer Taiwan and Compal Electronics both asked Intel for helping in achieving the sub-$1,000 price goal for the “Ultrabook” devices. So far, Intel has refused to give PC makers a subsidy for the notebooks, Acer president Scott Lin told the industry publication DigiTimes.

Without a price break, Windows-based laptops will suffer from Apple’s strength. “The Wintel alliance will need to do something or else all related IT players may be gone together,” the report cites Ray Chen, Compal Electronics.

In August, Intel denied a request by PC makers for a 50 percent discount on Ultrabook chips. The same month, Apple out maneuvered Ultrabook companies, snapping up suppliers for the unibody that would be used by the notebooks.

When Ultrabooks first appeared by Asustek, they carried a $1,600 price tag, far above Apple’s $999 11.66-inch entry-level MacBook Air. Intel wants Ultrabooks to cost below $1,000, yet be no thicker than 20 millimeters, offer “tablet-like features” and use a “thin, light and elegant design.” One more item could be added to that list: not impact Intel profits.

  • 300AShareMakesMeSmile

    I don’t quite understand.  Why are these people whining to Intel?  Intel has to set its prices fairly in order to satisfy its own shareholders and pay for R&D and such.  Shouldn’t it be up to those manufacturers to make their product appealing enough to consumers to be worth paying the extra money for.  Why should Intel lose 50% on every processor?  That’s an unreasonably huge discount to ask for.  Intel designed a very good reference model for the ultrabook and likely that’s what it’s going to cost to match the quality of the MacBook Air.  Why don’t these companies petition Microsoft to give them a break on Windows OEM licenses while they’re out there complaining?  Microsoft seems to be making a lot more revenue than Intel and Microsoft is only pushing a recycled Windows OS every year whereas Intel has to design processors from the ground up.

    These ultrabook vendors should not be concerned about competing with Apple.  They should be concerned about building products that consumers like to use.  All things being equal, Windows ultrabooks should cost the same as MacBook Airs and sell to consumers each on their own merits.  Who says ultrabooks should be able to be sold for under $1000.  If the Windows vendors don’t feel they can compete with the MacBook Air, then they should build some other type of notebook that consumers like.

  • gareth edwards

    spot on.

  • cliqsquad

    Well it is Intel’s initiative, they are behind in the Mobile sector, they will be in future Android devices but before that they put together this Ultrabook category to target a mobile demographic that need more than Tablets, a ultra portable computer. Intel wants the cost below $1,000. Obviously, OEMs are having problems keeping cost down and making a profit. They need to tell Intel that they can’t do it and scrap themselves from the Project or Intel needs to drop the price. This is Intel’s goal, not the OEM’s. Asking Microsoft to drop the licensing fee’s would be dumb, when MS is not involved with the push for these devices.

  • imajoebob

    My reaction is a bit schizophrenic (or “dissociative,” as the current lingo demands).  First, if these guys can’t compete with Apple on putting together the rest of the components, that’s just too bad.  They’ve spent two decades putting together PoS systems, and then trashing the “Apple Tax” for refusing to make crap.  You can’t make crappy unltrathin computers (that will work), and they lack the necessary design and manufacturing ability to lower their costs.  Tough luck, Acer.

    On the other hand, Intel crushed their competition through the cooperation of these same vendors that are now looking for their help.  Cyrix is long forgotten thanks to de facto exclusive agreements with Intel, and AMD is still on the margins (heck, even with Apple).  Intel used them like a drug dealer uses a crack head.  Now that they’ve eliminated any real competition they’ve jacked up the price and tell ‘em to go look elsewhere if they don’t like it?  Nice loyalty, Intel.

    Intel needs to tread carefully.  What happens if AMD is able to meet the price point that Intel won’t?  An entire new product category will come through labelled “AMD Inside,” and it becomes identified as the new cutting edge processor.  The PC makers will be climbing over each other to be the first identified as solely AMD-powered.  If Apple succeeds in converting all their systems to the A-series chips, Intel suddenly has NO customers left.  Oops.

    I think Intel will eventually move on the price, but Acer and the others are going to have to figure out some more cost savings for themselves.  Intel isn’t going to swallow the entire price difference.

  • David A Stephens

    I find it interesting that Microsoft is going to release a version of Windows on an ARM processor.

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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