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Intel refuse 50% CPU price cut to partners, offer 20% instead

Intel have been under pressure lately to supply their partners with UltraBook CPU’s at a 50% price reduction. They have rejected the proposal and have offered a 20% price discount instead to first tier notebook partners.

We heard this from sources in Taipei late last night, and it has been since confirmed in detail by Digitimes.

Prices for processors such as the Core i7 2677 will drop to $317 USD. and the Core i5 2557 will drop to $250 USD – this only applies to first tier partners. According to the Digitimes report, the high price of certain models in Asustek and Acer’s range have been limiting their sales.

“Intel’s Oak Trail platform, paired Atom Z670 CPU (US$75) with SM35 chipsets (US$20) for tablet PC machine, is priced at US$95, already accounting for about 40% of the total cost of a tablet PC, even with a 70-80% discount, the platform is still far less attractive than Nvidia’s Tegra 2 at around US$20. Although players such as Asustek Computer and Acer have launched models with the platform for the enterprise market, their machines’ high price still significantly limit their sales, the sources noted.”

With the reduced prices, there are concerns that Intel will have a problem maintaining their 60% gross margin rates.

Kitguru says: A good move for the chip giant to help push higher sales volumes for partners?

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