Intel to subsidise Ultrabook prices

ASUS, Acer and Toshiba are all witnessing Intel’s rather rare generosity. Intel is providing a $100 subsidy to each Ultrabook they produce which is intended for them to pass on to the consumer as a price drop. Although, it is a long and bureaucratic process so it could take a while for the benefit to be passed onto the consumer. The price drops are expected to happen in the first quarter of 2012 so they won’t fall in time for the Christmas period but for the period thereafter. Expect prices to fall 5-10% which could give Ultrabooks that competitive advantage over MacBooks and tablets.

Currently manufacturers are struggling to meet the recommended $1000 price limit by Intel. Material costs for the Ultrabooks amount to in the region of $640 and then including distribution and marketing costs among other things and the cost is closer to $940. Add Intel’s $100 subsidy bringing the costs down to $840 per Ultrabook and manufacturers can breathe a little easier and pass on a $50-$75 reduction onto the consumers. Although, Intel may expect $100 price drops in which case ASUS, Acer and Toshiba will still have to operate within tight margins of about $40-$60 per product.

Source: Digitimes