Intel May Slash Core i3 "Ivy Bridge" Pricing to Popularize Ultrabooks - Report

Intel Reportedly Mulls Slashing Costs of Ultra Low-Voltage Chips to Boost Ultrabooks

by Anton Shilov
07/04/2012 | 06:19 PM

After numerous attempts to convince PC makers to reduce their profit margins further and use innovative plastic materials to reduce the prices of ultrabooks, Intel Corp. may now be ready to slash the cost of some of its ultra low-voltage microprocessors by a little more than 10% in a bid to make new types of PCs more attractive.

 

For over a year now Intel has been trying hard to lower the pricing of ultrabooks, high-performance, highly-responsive thin-and-light notebooks powered by its chips. Although Intel originally recommended to use expensive materials, such as metals or alloys, to compete with Apple MacBook Air in terms of aesthetic, it recently started to suggest usage of certain relatively inexpensive rugged plastics to broaden the markets addressable by ultrabooks. While many plastic substances are rather strong, they cannot be used everywhere. As a result, many original design manufacturers (ODMs) have invested into companies who make metal PC cases in a bid to secure supply of ultrabook cases.

Another way to reduce the costs of notebooks is to reduce profit margins of actual manufacturers. This is not easy to do, given the fact that gross margins ODMs nowadays are below 7%, according to IHS iSuppli market tracking firm.

All-in-all, Intel has reportedly decided to reduce the prices of its ultra low-voltage Core i3 "Ivy Bridge" central processing units in order to make ultrabooks more affordable without further cutting ODMs' profitability or using cheap cases that may eventually crack and returned to stores, which will damage reputation of ultrabooks and PC suppliers. The reduction on Core i3 ULV chips will be in $25 - $27 range, said Cody Acree, an analyst with Williams Financial Group, citing Chinese-language Commercial Times news-paper.

At present Intel has only one mobile Core i3 chip with 17W thermal design power that is suitable for ultrabooks: the model i3-3217U with two cores, 1.80GHz clock-speed, 3MB cache and Intel HD 4000 graphics core. Right now Intel sells the chip for $225, hence the $25 - $27 slash will be over 11%, which seems to be a rather significant, yet not a dramatic price-cut that changes everything.

It remains unclear whether Intel's idea to offer low-cost central processing unit for premium ultrabooks will pay off. Nonetheless, it will likely at least make clear what consumers want from ultrabooks (performance or portability amid rapid response) and will get Intel's partners ready to meet low-cost AMD's ultrathin laptops initiative.

Intel did not comment on the news-story.