Print 23 comment(s) - last by R!TTER.. on Sep 17 at 1:42 AM

Intel promises low prices -- but will OEMs listen? And more importantly, does OEM believe in its own message?

Intel Corp. (INTC) has a pretty interesting pricing strategy that it's revealed at the 2013 Intel Developer Forum (2013 IDF).  Three messages can be taken away from the pricing Intel has revealed.  

First, it is a great time to be a PC buyer -- if you're interested in an Intel PC.  Prices on Intel equipped PCs -- which will start at $99 USD -- have never been cheaper.  Second, Intel has to be compromising its famously high margins to hit these price points (you'll agree when you see them).  And third, for the first time Intel has a clear tiered price hierarchy in which price is (somewhat) a function of utility and processing power (seemingly a fair deal).

For the holiday Intel is targeting starting price points of:
  • $99 USD for Bay Trail tablets

    Intel tablets Bay Trail
  • $199 USD for "clamshell" (e.g. traditional budget) laptops (Bay Trail or Celeron)

    Old fashion clamshell
  • $299 USD for "2-in-1" laptop-cum-tablets (flip, slider, detachable, or swivel form factors) (Bay Trail or Celeron)

    Form factor: two in one
  • $399 USD "Ultrabooks" with Core series chips

    Form Factor: Ultrabook
The big question is whether OEMs will cooperate with these aggressive prices.  After all "starting at" by no means says that all -- or even the majority -- of OEMs will offering product at these prices.  Intel had promised very low ultrabook prices in 2012 -- and it largely failed to deliver on those promises.  What's even more troubling in the present context, is that Intel itself seems somewhat conflicted about its commitment to budget pricing.

For its past two keynotes it emphasized low, sub $400 price tiers.  But at the Bay Trail deep dive semi-technical section, Intel's Mobile Vice President Herman Eul commented:

Our customers are not looking for the cheapest thing they can find. What they are looking for is the best thing they can afford…. This is the way for Bay Trail to close that gap as it delivers performance in multiple segments.

A $99 USD tablet certainly sounds cheap.  So the question is which direction Intel is truly committed to -- budget tiered pricing or "the best thing [the consumer] can afford."  Intel -- who has long struggled in the tablet market -- has traditionally adopted the latter philosophy.  Now as it throws in budget pricing rhetoric one must wonder whether it's changing direction, or merely adding a bipolar sales message to an already struggling campaign.

It's possible that Intel will be able to tread the line have sell to both the high and low end in the tablet/2-in-1/laptop market.  But if it slips, these mixed signals could come back to haunt it.

[All Images (c) Jason Mick/DailyTech LLC, may be used with citation]

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By Jeffk464 on 9/11/2013 6:35:45 PM , Rating: 2
How good can it be for $99. If its spec'd anything like the Nexus 7 FHD I'm definitely in.

RE: 99
By stm1185 on 9/11/2013 6:41:12 PM , Rating: 5
Pretty good if they don't require Apple or Samsung profit margin.

RE: 99
By fic2 on 9/11/2013 8:17:37 PM , Rating: 1
It won't be spec'd like anything you would want to buy. If the past is any indication the screen resolution will be very sub-par. It seems like any kind of tablet with an Intel cpu in it has to take a huge hit in screen resolution AND being higher priced than an ARM equivalent. Whether this is because of Intel margins, Intel GPUs or ?

RE: 99
By Flunk on 9/11/2013 10:30:00 PM , Rating: 4
Seeing as the Nexus 7 is basically sold at cost you can expect some serious cuts to get these devices down to $99, even if Intel is selling chips for $5. It's not like the competitive ARM chips are really expensive.

RE: 99
By ET on 9/12/2013 2:46:29 AM , Rating: 2
$99 is probably for low end Android tablets, something like 1024x600 screen, 8GB storage, lowest end Bay Trail with 1GB RAM.

What most people want from an Intel based tablet is Windows, and that adds the Microsoft tax. It's possible we'll see Windows based tablets for as low as $200, but I'd be surprised if they go under it, and I'll even be surprised by the $200 ones.

RE: 99
By flyingpants1 on 9/12/2013 11:53:21 PM , Rating: 2
Nothing wrong with those specs for $99. More than enough for most people.

The Asus Memopad is $107 on Amazon right now.

RE: 99
By R!TTER on 9/17/2013 1:42:07 AM , Rating: 2
What you're assuming is that such tablets are gonna have comparable specs to Nexus 7, which I'm pretty sure ain't gonna be the case, but unless Intel heavily subsidizes these devices I see no way in hell the bunch of'em selling for 99$ heck even 150$ would be a stretch for any device that has to pay the Intel tax!

By mik123 on 9/11/2013 6:31:03 PM , Rating: 2
What's "Core series chip"?

RE: Core?
By dgingerich on 9/11/2013 6:41:59 PM , Rating: 2
Core i3, Core i5, Core i7...

RE: Core?
By mik123 on 9/11/2013 7:58:40 PM , Rating: 3
I hope they mean Haswell...

RE: Core?
By drumsticks on 9/12/2013 10:48:42 AM , Rating: 2
Well I would assume so...

Core is just a brand, 4th gen core is haswell, and while they didn't specify it, it would be silly not to do haswell.

RE: Core?
By mik123 on 9/12/2013 3:03:42 PM , Rating: 1
$399 Haswell ultrabooks?
They would pretty much have to give out the chips for free to make that happen.
Bullshit aside, anything they can do to drive the prices down is good imo.
I'm really hesitant right now to dump $1,500+ on an ultrabook (Asus Infinity, Samsung Book 9+, Yoga 2 Pro, or new MBP)

$299 still too high
By MikeDiction on 9/12/2013 3:35:20 PM , Rating: 3
Any laptop/tablet aimed at the "cum" market needs to be cheaper. People have been cumming off far cheaper devices for years.

RE: $299 still too high
By UnauthorisedAccess on 9/12/2013 8:36:15 PM , Rating: 2
...wait what?

RE: $299 still too high
By Alexvrb on 9/13/2013 10:21:56 PM , Rating: 2
$299 USD for "2-in-1" laptop-cum-tablets
They need to take their readership into account when writing such things.

By BRB29 on 9/12/2013 6:57:02 AM , Rating: 2
How much tablet can you expect at $99?

I would say the sweet spot for a tablet is about $300. I would rather pay more(not apple prices) for a decent tablet than to pay less for crap that will just gather dust. The most expensive tablet you buy is the one you don't use.

The iPad2 still sell very well because of its price. I'm looking forward to see what MS can deliver at $300 range.

The cheap Galaxy tablets have been a let down so far.

RE: $99?
By invidious on 9/12/2013 10:23:02 AM , Rating: 2
Unfortunately a big part of why Apple can deliver an iPad 2 at $300 is because it is an old product. The R&D has already been recuped and the product doesn't need to be advertised.

Apple also owns 100% of the software market (excluding jailbreaking) for the iPad, so eaceh iPad sold is going to generate residual income. Microsoft certainly sells some software and it is trying to expand that footprint with their windows store featured in W8, but it is not garunteed income like Apple has with their app store.

I think $300 is a reasonable price point for a windows RT tablet, but most people who want a windows tablet wnat windows x86. I think their best bet is to aim for market penetration with a netbook caliber windows x86 tablet at around $500 that focuses on battery life and minimum hardware to maintain smooth performance in productivity applciations and simple 2d games. Then also offer a notebook caliber windows x86 tablet at around $700 that can handle complex 2d games and simple 3d games.

Hard drive and ram bays need to be accessable so that people can upgrade when they choose.

Poor track record
By Hector2 on 9/13/2013 11:47:17 AM , Rating: 2
Starting with netbooks several years ago and Ultrabooks since early 2012, Intel has been boldly predicting much lower prices than what OEMs actually shipped.

When netbooks first came out, instead of the <$300 prices Intel had been predicting, they were priced by OEMs at $400-$500 (hoping buyers would think they were just as good as laptops). In 2008, it was reported that netbook prices "might well drop by the holidays to $249". Then in 2011, "Intel said it has introduced a new Atom processor to bring down the price of netbooks to under $200".

Did anyone ever see a netbook for under $300 ? No! This all seems like just wishful thinking by Intel and marketing buzz. Why would it be any different this time around ?

RE: Poor track record
By flyingpants1 on 9/14/2013 7:24:14 AM , Rating: 2
What are you talking about? Netbooks have been $199 for years. It was possible to pick them up for $99 on sales or with coupons.

By TEAMSWITCHER on 9/12/2013 12:28:47 PM , Rating: 2
This has got be Apple's evil master plan. Forcing the entire PC industry into ridiculously thin margins, slashing R&D budgets, and forcing bloatware on users to recoup lost profits. Unless there is some serious consolidation, the companies that make these devices will all be competing against each other...not Apple.

The return of netbooks
By flyingpants1 on 9/12/2013 11:56:00 PM , Rating: 2
Bay Trail in netbooks at $199 is a lot more interesting, this is what netbooks were intended to be. They'll be in direct competition with chromebooks, hopefully eventually running full Windows 8 in an iPad-like profile for the price of a chromebook or iPad mini.

They're also 2-3 years too late. Consider the iPad was only released in 2010 and look at the massive head start Apple had. Intel should have had a tablet and phone SoC out ages ago.

$99 ?
By Hector2 on 9/13/2013 11:01:57 AM , Rating: 2
I already have a high-end 6-core PC at home as well as a laptop. I've avoided tablets so far because I really don't have a compelling use for them.

But for $99, I'm in just to try it out

By jbwhite99 on 9/13/2013 12:46:35 PM , Rating: 2
PC Costs have significantly CLIMBED this year. Memory has doubled, HDD are flat (and at the low end are increasing), Microsoft is raising royalty rates, and with oil high, so is plastic.

Intel and Microsoft, as software companies, can afford to make statements like this. (Intel is SW, since most of their spending is in R&D and fab construction, and very low product costs, so incremental margin is much higher).

What really needs to happen is a new "killer app". Tablet sales have been driven by media (Amazon Instant, Netflix, etc) - in order for a new revolution, there needs to be a new killer app. Visicalc and 123 started this craze, desktop publishing kept it going, what's next?

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