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Ultrabook prices to fall as manufacturers slash margins

Intel’s subsidy helping as Christmas sales loom

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Manufacturers are cutting their margins to the bone, and getting a subsidy from Intel, in an effort to make ultrabooks more affordable.

Acer, Asustek Computer and Toshiba may be able to put out hardware below the critical $1,000 mark, unnamed sources told DigiTimes, and by 2012 prices could drop by up to 10 per cent. Intel is providing a $100 marketing subsidy as well, in a bid to further reduce costs.

The paper quotes build cost estimates for a 13-inch ultrabook as $940 – consisting of $690 for materials, $100 for manufacturing and $150 for marketing and distribution costs. The processor, SSD drive and screen are the biggest ticket items, costing $175-200, $140-150 and $45-50 respectively. Intel’s subsidy will help, but it’s clear OEMs aren’t going to be seeing much profit from sales.

Lenovo, HP, Toshiba and Dell are also planning to have new ultrabooks out in time for the Christmas selling season according to the source. This end of year period is going to be crucial to those companies who are hoping ultrabooks (a name Intel has trademarked) will breathe new life into laptop sales.

So far ultrabook sales have been less than stellar, with Apple still dominating the expensive end of the laptop market. Intel is keen to sell more processors using the design, as well as finding takers other than Apple for its Thunderbolt data connection system, and possibly NFC hardware, but analysts have warned that the platform needs to become much cheaper if it’s to take off.

Acer is certainly bullish about the market. President Jim Wong reportedly told journalists that the company was planning on shipping 250,000-300,000 ultrabooks in the last quarter of the year and said prices should slip to $899 next year and $499 in 2013. ®

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