Intel will not give in to demands of Ultrabook vendors to reduce the price of its CPUs by 50 percent, DigiTimes is reporting.
Citing anonymous sources, the Taiwan-based publication said that Intel was asked by its Ultrabook vendor partners to cut the price on its CPUs to help the companies improve their chances of profitability on the upcoming machine. However, for fear of missing out on its own profitability marks, Intel has agreed only to a 20 percent discount and some assistance with marketing costs.
Intel introduced Ultrabooks earlier this year. The yet-to-be-released computers from vendor partners, such as Asus, feature a laptop-like design with "tablet-like features." In order to qualify as an Ultrabook, a computer must be 0.8-inches thick or less and cost under $1,000. For its part, Intel has high hopes for Ultrabooks, saying that they could make up a large chunk of portable shipments in the coming years.
"Many of the super-sleek devices today are quite pricey. The price points need to become more mainstream," Intel marketing chief Tom Kilroy told CNET in an interview earlier this year. "And as volume ramps, say by the end of 2012, we think as much as 40 percent of the volume will be in this ultra category."
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However, some have called Ultrabooks' chances of success into question and point to the fact that only slightly larger computers are already available at an affordable price. CNET's Dan Ackerman, for example, pointed to a host of computers that deliver on affordability, power, and slim design, including the Dell XPS 15z and Hewlett-Packard Pavilion dm1z. Apple is also a player in that market with the MacBook Air, which comes with the design and power Intel wants to see in Ultrabooks.
Intel obviously sees the hurdles its category will be facing and wants to help vendors get their Ultrabooks off the ground when they start shipping later this year.
Last week, Intel announced a $300 million Ultrabook Fund designed to aid hardware and software partners in "enhancing how people interact with Ultrabooks such as through sensors and touch, achieving all day usage through longer battery life, enabling innovative physical designs, and improved storage capacity."
If DigiTimes' report is accurate, it appears that fund wasn't enough and that Intel apparently wasn't willing to go as far as its partners are asking. Even so, with a 20 percent discount on its CPUs, the company would be offering its Core i7-2677 to vendors for $317, while the Core i7-2637 would cost $289. The Core i5-2557 would go for $250, according to DigiTimes.
Intel did not immediately respond to CNET's request for comment on the DigiTimes report.