that Acer and Compal are asking Intel to drop ultrabook processor pricing in an effort to reduce sales prices and boost margins.
Acer Taiwan president Scott Lin says Intel is refusing to subsidize CPU sales and drop ultrabook prices below $1,000. The component costs seem to be relatively high, with low voltage processors accounting for a large share of the BOM.
Intel plans to seize about 40 percent of the notebook market with brand new ultrabooks, but thanks to its $1,000 target price and high production costs, vendors are seeing their margins melt away. According to Digitimes, vendors can make about $5 to $10 per ultrabook, while traditional notebooks yield a return of $10 to $20. Factor in the higher prices of ultrabooks and it is easy to see vendors are in a squeeze.
Intel hopes that component costs will go down as more manufacturers embrace ultrabooks and suppliers start churning out more ultra thin screens, lithium polymer batteries and cheaper solid state storage. The big question is when.