Intel Corp. has decreased pricing on its microprocessors sharply in order to boost demand towards new personal computers following lower-expected-sales of microprocessors as a result of unexpected economic weakness in Europe and China.
Bobby Burleson, an analyst with Canaccord Genuity, said in a note to clients that Intel Corp. had massively slashed prices on Core i3, i5, i7 and Atom processors by 50% and also reduced pricing on certain chipsets by 15%. The company, according to the analyst, wants to stimulate demand on its platforms, clear inventory and offset some of the effects of increasing popularity of tablets, such as Apple iPad, reports Barron's web-site.
“While notebook demand is likely to uptick near term following these cuts. It will be in large part the result of channel fill by Intel’s OEM customers, especially in China. [...]What is of particular concern is the risk of inventory overshoot as the PC supply chain focuses on China in an aggressive effort to offset weakness in the US and stagnation in Europe,” said Mr. Burleson.
The analyst noted that large computer makers, such as Acer, Lenovo and HP had also slashed notebook prices, but the demand towards personal computers would still be flat. On the one hand, those, who plan to buy an advanced PC, are likely to wait till Intel launches its Sandy Bridge microprocessors in 2010. On the other hand, a lot of customers are likely to wait with their purchase for better economic conditions or even acquire a tablet instead of netbook.