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!

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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