PC makers want cheaper Intel chips to compete with Apple's Air pricing

Posted:
in General Discussion edited January 2014
Struggling to compete with the pricing of Apple's MacBook Air lineup, "Ultrabook" PC makers have again asked Intel to reduce the price of its mobile CPUs.



Executives from both Acer Taiwan and Compal Electronics have turned to Intel and asked the chipmaker to aid them in achieving pricing below $1,000, according to DigiTimes. Intel has partnered with PC makers to push a new specification, dubbed "Ultrabook," designed to compete with Apple's popular thin-and-light MacBook Air.



Scott Lin, president of Acer Taiwan, reportedly said that his company is likely to adopt a lower-end processor or reduce component specifications to meet the sub-$1,000 price goal. He said Intel refuses to provide vendors like Acer with a subsidy on CPU prices.



Intel allegedly hopes to have 40 percent of consumer notebooks be super-light Ultrabooks in the future. But Ray Chen, president of Compal Electronics, said he thinks it's unlikely Intel will achieve that goal with current pricing.



"He added that if Ultrabooks suffer from weak sales, while Apple continues to enjoy strong profit, the Wintel alliance will need to do something or else all the related IT player may be gone together," the report said.



Price issues have been a recurring theme in the Ultrabook saga, as PC makers have failed to match the pricing on Apple's MacBook Air lineup. A month ago, Intel was said to have denied a request from PC makers for a steep 50 percent discount on CPUs for the Ultrabook specification.



In addition to struggling with pricing, Ultrabook makers have also had to contend with Apple's dominance in the overseas supply chain. In August it was said that Ultrabook makers were out-muscled by Apple for acquiring unibody metal chassis for ultraportable notebooks.







Apple's MacBook Air lineup starts at $999 with the low-end 11.6-inch model, and Intel hopes to compete with Apple on pricing. But some of the first Ultrabook models announced were priced well above the $1,000 threshold, such as Asustek's 13.3-inch UX31 at $1,600.



Intel's Ultrabook design calls for systems to retail for less than four figures and sport form factors that are no more than 20 millimeters thick, with "tablet-like features" in a "thin, light and elegant design." The new MacBook Air design first released in late 2010 has proven to be so popular that it even prompted Apple to discontinue its white entry-level MacBook, which also sold for $999.
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Comments

  • Reply 1 of 102
    But the MacBook Air uses Intel chips!



    So, if Intel lowers the price of their chips, then the MacBook Air can go lower on price.
  • Reply 2 of 102
    "Apple's MacBook Air lineup starts at $999 with the low-end 11.6-inch model, and Intel hopes to compete with Apple on pricing."



    Not sure that I understand that statement. Maybe it should read other Intel customers hope to compete ...



    Chris
  • Reply 3 of 102
    macrulezmacrulez Posts: 2,455member
    deleted
  • Reply 4 of 102
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by cajun View Post


    But the MacBook Air uses Intel chips!



    So, if Intel lowers the price of their chips, then the MacBook Air can go lower on price.



    Yeah, they're asking for a pricing advantage over Apple. There's no way Apple's buyers will let that slide. Only one buyer in the PC world has real leverage over suppliers, and that's Apple. All the rest are always at risk of going out of the business at any moment.
  • Reply 5 of 102
    For years the PC business was dominated by manufacturers whose only skill was being able to assemble the same old components in a big plastic box for as little money as possible. Very few of these companies, Sony stands out as an exception, know the first thing about invention and industrial innovation so their only answer is to get the price of their components down. Why don't they try inventing something. Why would Intel, who in fact did invent something in this case, lower the price of their product and thus undercut sales of their very own chips in the Air. It makes no sense. Intel spent time and money developing a really tiny, low energy chip. Now they have to sell it out of the gate at a discount?
  • Reply 6 of 102
    mr. memr. me Posts: 3,219member
    Acer is out to lunch. Intel processors are expensive. Windows is expensive. Ultra lightweight Windows laptops are based on Intel's reference platform which is also expensive. Apple uses Intel processors, but it relies on its own resources rather than the expensive Microsoft Windows and the expensive Intel reference platform. What this gets down to is that there is no substitute for innovation. Back in the late 1980s, the PC clone manufacturers came together to develop and adopt the EISA bus to replace IBM's ISA bus. They should come together again to develop an ultra lightweight laptop platform to reduce their total dependence on Intel. It is either this or oblivion.
  • Reply 7 of 102
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by MacRulez View Post


    Inept whingers. If I had access to the fabrication Dell has access to, I could solve this problem for them in a day.



    The amazing thing is that someone on a forum and Newegg can say this without blinking. Do you really think there aren't people at Dell who are as good at assembling a computer as you are? It's harder than you think, and I don't pretend to know why, but if your conclusion doesn't add up, check your premises.
  • Reply 8 of 102
    sandausandau Posts: 1,230member
    In August it was said that Ultrabook makers were out-muscled by Apple for acquiring unibody metal chassis for ultraportable notebooks.







    wait, didnt apple do the first true unibody?
  • Reply 9 of 102
    Quote:
    Originally Posted by cajun View Post


    But the MacBook Air uses Intel chips!



    So, if Intel lowers the price of their chips, then the MacBook Air can go lower on price.



    I'm glad this was the first post because this whole story didn't make sense because of that very fact...
  • Reply 10 of 102
    Geez, what a bunch of whiny beggars. What's with all these international companies asking the US company who is trying to save their butts for a handout? Seriously? Compete or die.
  • Reply 11 of 102
    Quote:
    Originally Posted by cameronj View Post


    The amazing thing is that someone on a forum and Newegg can say this without blinking. Do you really think there aren't people at Dell who are as good at assembling a computer as you are? It's harder than you think, and I don't pretend to know why, but if your conclusion doesn't add up, check your premises.



    He didn't say he would do their job for them in a day... he said he would solve the "problem". In the absence of real innovation of their own, the problem is to get a pair of balls and get radical and follow Apple all the way -- for example, drop the optical drive and legacy ports as he said. There, problem solved. Design by committee is half their problem. I think most of us on this forum could walk into most PC box assemblers and solve half their problems. Their managers should just read this forum
  • Reply 12 of 102
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by sandau View Post


    In August it was said that Ultrabook makers were out-muscled by Apple for acquiring unibody metal chassis for ultraportable notebooks.



    This is silly.



    First, there are ways to build a computer other than using machined aluminum.



    Second, aluminum machining capability is available in thousands, if not millions, of shops around the country. There's no way Apple has monopolized the aluminum milling market.



    Bottom line is that Apple can do it with Intel's old prices - and still yield a nice margin. There's no intrinsic reason why Ultrabook makers can't do it, too. Even Apple's vaunted volume advantage is not that big a deal. Volume reduces costs dramatically on some things, but not on machined parts. There, the volume savings are much more modest. And most of the other components are industry standard (CPU, RAM, screen, power supply, etc).



    It would be interesting to see why they're finding it so hard. My guess is that they don't get the entire Ultrabook concept and they're trying to jam it full of everything from serial ports to parallel ports to 10Base2 connectors along with Blu-Ray and 100 other things that the machine doesn't need.
  • Reply 13 of 102
    Quote:
    Originally Posted by cajun View Post


    But the MacBook Air uses Intel chips!



    So, if Intel lowers the price of their chips, then the MacBook Air can go lower on price.



    Exactly what I was thinking - Apple buys chipsets from Intel. I wonder how much of the rest of the logic board is Apple's design? How does Apple do it anyway? They have a large margin on sales, so other makers should be able to match prices if they used a lesser margin than apple.
  • Reply 14 of 102
    Quote:
    Originally Posted by jkichline View Post


    Geez, what a bunch of whiny beggars. What's with all these international companies asking the US company who is trying to save their butts for a handout? Seriously? Compete or die.



    Given that they've just seen the U.S. government illegally stop companies from failing, they're pretty much justified in their mindset of "talk to a U.S. company to get free crap for doing absolutely nothing and whining about it long enough."
  • Reply 15 of 102
    Quote:
    Originally Posted by Tallest Skil View Post


    Given that they've just seen the U.S. government illegally stop companies from failing, they're pretty much justified in their mindset of "talk to a U.S. company to get free crap for doing absolutely nothing and whining about it long enough."



    I assume you are talking about the bank bailout. What crimes were committed? Or are you talking about the bailout of GM and Chrysler? In that case, I ask again what are the specific illegalities to which you refer or is this just wing nuttery on the wrong forum. Try Kos or Red State.
  • Reply 16 of 102
    Quote:
    Originally Posted by strask View Post


    I assume you are talking about the bank bailout. What crimes were committed? Or are you talking about the bailout of GM and Chrysler? In that case, I ask again what are the specific illegalities to which you refer or is this just wing nuttery on the wrong forum. Try Kos or Red State.



    Oh, forgot about the banks. I'm talking about favoritism in what's supposed to be a free market economy.



    However, that's secondary to the point I'm making. I knew people wouldn't give a crap about the real point, though.
  • Reply 17 of 102
    macrulezmacrulez Posts: 2,455member
    deleted
  • Reply 18 of 102
    To complete with Apple mobiles.

    MS donates windows for free.

    MS subsides PC manufactures.

    MS doesn't charge app developers.

    MS does an emulator equal to Mac OS 8.6

    MS gets about 8% to 10% of internet use with above.



    MS uses Safari as default browser.

    Internet use goes up to 30% share.



    MS bought by Google.

    0% share.
  • Reply 19 of 102
    nofeernofeer Posts: 2,422member
    Quote:
    Originally Posted by MacRulez View Post


    +1



    I don't understand this kvetching. Just drop the optical drive and the legacy ports, make it slim, and ship it. Don't talk about it, do it.



    A quick visit to NewEgg.com gets me all the components I need for relatively little money; the only things not available off the shelf are the enclosure and the motherboard to fit into it.



    The problem is not the CPU. It's the form factor fabrication.



    There's nothing stopping them from doing this right now except their own inability to execute.



    Inept whingers. If I had access to the fabrication Dell has access to, I could solve this problem for them in a day.



    right on, also, apple has a lock on the machines to make the case, others can't and use other materials, apple has them buffaloed and they want to blame someone

    they want an excuse to put out junk and blame others, they can't compete on price, logistics (thank you tim cook) costs, etc

    so let them put out junk and compete with that



    just wait till apple uses a6 a7 of there own design in the macbook line wow bloodbath
  • Reply 20 of 102
    Quote:
    Originally Posted by cajun View Post


    But the MacBook Air uses Intel chips!



    So, if Intel lowers the price of their chips, then the MacBook Air can go lower on price.



    Yes Apple will also be able to reduce prices. However, Apple's market is the above 1000$ market. The pc makers have the sub 1000$ market. So even though all prices will come down, it is important for pc makers to get below the 1000$ level EVEN if Apple's prices come down as well.
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