Intel refusing to cut ultrabook chip prices

Company refuses to offer 50% discount to OEMs on ultrabook CPUs
Omar Qudsi,

We’d all love for ultrabooks to reach that magical sub-$1000 price range, but it’s looking less and less feasible by the day. Intel has already invested around $300m in the ultrabook concept and a switch to a fiberglass based design could be in the works, but all that may still not be enough to reach targeted prices while maintaining profits.

According to a report by Digitimes, Intel has rejected a demand from OEMs to reduce ultrabook CPU costs by 50%, and instead countered with a 20% figure. According to the publication, Intel is insisting on their high costs in order to maintain a leading position in the supply chain and to minimize any effect on future laptop development.

As for the discount being offered by Intel, it will only apply to “first-tier notebook players” with other manufacturers being left out. The price cut appears to pertain to the Core i7-2677, Core i7-2637 and Core i5-2557 CPUs, with their prices ending up at $317, $289 and $250 respectively.

While both Intel and the OEMs have grounds for their argument, ultimately it may be unfeasible for companies to offer a ~$900 notebook when the CPU accounts for 1/3rd of the price. As such, Intel will likely have to decide how far they’re willing to go with the ultrabook project and whether or not future gains can compensate for short-term losses.


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Omar Qudsi, 2011-08-17 (Update: 2012-05-26)