Ultrabook CPUs still too expensive, say notebook makers

Despite Intel reportedly outlining Ultrabook bill-of-materials costs in the $475-650 range for 21-mm-thick systems and $493-710 for thinner 18-mm ones, notebook makers are still unhappy with how much the chip giant is charging for its CPUs. DigiTimes and SemiAccurate both cite sources within the industry as saying that notebook makers demanded a 50% reduction in CPU prices. Intel, they say, was only willing to offer a 20% discount.

At 20% off, Ultrabook CPUs will purportedly cost $250-317. That’s a huge chunk of the total bill of materials, and it doesn’t appear to include an associated chipset. If you’re wondering why there aren’t all that many Atom slates out there, look no further than the cost of the Oak Trail platform. Made up of an Atom Z670 CPU and SM35 chipset, the Oak Trail tandem is said to cost tablet manufacturers $95. Nvidia’s Tegra 2, by contrast, runs "around $20."

Ultrabooks are set to pack Sandy Bridge CPUs with 17W TDPs, and there really isn’t any competition for those chips. Zacate-based APUs have similar power envelopes but much slower CPU cores, while the new Llano-based mobile chips live in the 35-45W range. At least for now, notebook makers are going to have to work with Intel if they want to match the MacBook Air’s performance and profile.

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    • anotherengineer
    • 8 years ago

    Too bad the world’s main OS couldn’t run on ARM.

    Edit – “world’s main OS” – windows XP and 7 which is what most of the world’s consumers and businesses run.

    If Win XP and Win 7 could run flawlessly on ARM I think it would give Intel more competition in this area.

      • ew
      • 8 years ago

      Linux runs just fine on ARM.

        • End User
        • 8 years ago

        Good one. 🙂

        +1

      • Corrado
      • 8 years ago

      Windows 8 will. OS X sort of does. Linux does. What OS are you speaking of.

        • ImSpartacus
        • 8 years ago

        OSX runs on ARM? You mean iOS?

          • Corrado
          • 8 years ago

          iOS and OS X both use the Darwin kernel. Thats why I said OS X sort of does. If they wanted full OS X on ARM, my guess is they could do it pretty quickly.

            • ImSpartacus
            • 8 years ago

            Hmmm, didn’t know that.

            • Corrado
            • 8 years ago

            I actually wouldn’t be surprised if they already have it running in iPads and what not just for engineering exercises.

    • Stefan
    • 8 years ago

    I still don’t get it: What would be the Ultrabook application that you would need a seriously fast CPU for? It’s an ultraportable device. People use it for browsing, word processing, watching movies while on the way. Graphics solutions in Ultrabooks tend to be on the crappy end (compared to desktop or more power hungry mobile variants), so that any gaming that would require a fast CPU isn’t an option anyway. And nobody does heavy rendering jobs on their Ultrabook, right?
    Maybe it’s just me, but I want my ultraportable to be sufficiently fast for browsing, last-minute-editing my presentation while on the way to a congress or watch a movie afterwards. (Those are all things even my old trusty Athlon-XP2800 could do reasonably well.) For everything else, I use my dekstop solution with a reasonable size LCD. Oh yes: And I want my ultraportable to be on the less expensive side, so Zacate would be just right for me. (In fact, saving a few bucks on the CPU that can then be spent to afford a decent quality display sounds like a admn good idea to me…)

      • cegras
      • 8 years ago

      Unfortunately I am willing to bet your XP is faster than the Atom, and it probably won’t do these days with additional OS overhead and software overhead. The problem is that intel does not offer anything to bridge the performance gap between atom and the much more expensive sandy bridge.

        • xeridea
        • 8 years ago

        I am calling BS. The atom is a complete POS and can’t compete on performance with anything, other than cell phones. I tried a friends atom netbook, and it took like 5 minutes to do anything. I had an XP2100 and it was totally fine. Atom being complete trash is one reason netbooks are unpopular. So how much you wanna bet?

          • Corrado
          • 8 years ago

          I disagree somewhat. I had a 1st gen Atom in an MSI Wind. Using a real HD with a 1st gen Atom in XP was more than usable for office work. It choked on Flash, but everything else ran fine.

          • Ricardo Dawkins
          • 8 years ago

          just one day ago I though the same thing about Atom. until I got to fix the dual-core Atom based rig for my cousin. The performance for browsing flash riddle sites like mlb.com, youtube.com etc while doing a session of IM in messenger was pretty good to me under Windows 7.

          Pretty fast boot time, good performance all around. Pretty good for an Atom CPU.

          • NeelyCam
          • 8 years ago

          Yeah and his pos hard drive and his pos norton antivirus had nothing to do with it..

            • sweatshopking
            • 8 years ago

            atom isn’t THAT bad, but it’s terrible compared to brazos. i’ve owned a few of each system, and there is no comparison.

          • xeridea
          • 8 years ago

          The atom is somewhere in line with a fast Pentium 3. And the onboard graphics of a P3 are faster (though only supporting Dx8).

          • cegras
          • 8 years ago

          Oh, I agree. I was saying the XP is probably way better than the atom, but modern software requirements have probably hamstrung both.

            • xeridea
            • 8 years ago

            Oops read it wrong. Anyway, I don’t think modern software requirements are that bad. As long as you don’t have crappy bloated AV, or other resource wasting TSRs. My Wal-mart special AMD L310 laptop (dual 1.2 Ghz) was adequate for a few months before I replaced chocolate milk disaster desktop. It was a bit sluggish for work, on my high res monitor (when being used to desktop), but it wasn’t terribly crawling slow like an Atom. I had an XP 2100 and it didn’t seem slow at all. It did photo editing, browsing, and gaming alike at decent speed. Win7 isn’t really slower than XP if you have at least an OK CPU (anything 1GHz+ that is NOT an Atom), and limited bloatware (that would slow down any computer/OS).

      • OneArmedScissor
      • 8 years ago

      “What would be the Ultrabook application that you would need a seriously fast CPU for?”

      You don’t. You need an ULV CPU so that it all fits into the ludicrously thin chassis, which Intel wants to be an i5 or better, because they make a pretty penny on those, of course.

      This is all about branding, so they’re not going to put a Celeron in it and also slap an “Ultrabook” sticker on.

      • dpaus
      • 8 years ago

      [quote<]I still don't get it[/quote<] No, respectfully, you don't. There is a market for premium ultraportable devices: executives who do run some serious software, and have significant files on-board, and who need portability, but aren't interested in a luggable. And when they get back to the office, they expect all the connectivity features of a high-end laptop: USB 3.0, DisplayPort [i<]and[/i<] HDMI [i<]and[/i<] RGB (for those old projectors...), etc. Ultraportables: they're not just for casual surfing anymore.

    • chuckula
    • 8 years ago

    Is Intel asking too much right now?
    YES

    Are the notebook makers asking for unreasonably large discounts?
    YES

    Proper haggling should come to a happy medium. The Ultrabooks are supposed to be Macbook Air-like so nobody is expecting prices of < $500, but they don’t want to go beyond $1000 for the base models at least either.

    • dpaus
    • 8 years ago

    I can’t help but wonder what would happen if someone like HP or Dell were to order thousands of private-label Zacate CPUs under non-disclosure and simply put together a system and put it on the shelves (not unlike what Apple did with the iPad’s CPU). I doubt many of the potential purchasers would miss the incremental % of CPU performance. I suspect most of those purchasers (assuming the price point was well under the MBA price) are more interested in the form factor than raw performance. As long as it’s ‘good enough’ to run their programs and/or some light games, I bet they’d sell well.

    Following the same line of reasoning, I can’t help but wonder if HP has considered buying AMD, or at least taking a major stake in them.

      • anotherengineer
      • 8 years ago

      I just bought a zacate/brazos E-350 notebook for my wife. HP 2000-240ca, got it on sale for $330 cnd

      I really thought win 7 was going to be awful on it (compared to my desktop) but it’s actually pretty decent for 1.6GHz. And with netflix, or youtube running cpu usage is about 25-30% with MSE actively running in the background.

      Only bummer is no hdmi or usb 3.0, although it does have vga, but for $330 I guess one can’t complain.

      It’s much better than her 2001 Dell Inspiron 4150 and its one single usb 1.1 port lol

        • NeelyCam
        • 8 years ago

        Is Silverlight updated to use hardware acceleration yet? I mean, can you run Netflix HD on it without problems?

          • Corrado
          • 8 years ago

          Whether or not its implemented on Zacate, I can’t say. But there is definitely a hardware acceleration component to Silverlight.

          [url<]http://msdn.microsoft.com/en-us/library/ee309563%28v=vs.95%29.aspx[/url<]

          • sweatshopking
          • 8 years ago

          i do.

          • anotherengineer
          • 8 years ago

          Honestly I do not know as I didn’t have a chance to check HD yet. The monitor will only support up to 720p anyway but i guess I could check it.

        • odizzido
        • 8 years ago

        I got a c-50 laptop with HDMI out for around 270CND and it is great. I couldn’t go back to a laptop without HDMI out now.

        I did need to install a two gig stick of ram though because one is simply not enough even for just web browsing on windows 7. A shame because it was enough on my XP laptop.

          • anotherengineer
          • 8 years ago

          Nice Find!

          I keep looking to see if I can find one before the trade in deadline with HDMI, however the HTPC kinda covers that anyway, but it would still be really nice to have.

    • Farting Bob
    • 8 years ago

    You want the latest and greatest CPU’s to put in your ultra thin laptop? Expect to pay for it then.Or just use cheaper CPU’s…

    • nagashi
    • 8 years ago

    Considering the windows notebook ASP is around $500 these days, a BoM starting at $475 means you’re going to have to market this towards the upper end of the market. As in, the top 20% of the market, which is currently mostly apple nowadays. Given apple’s enormous flash/lcd/misc buying power, I’d be very surprised if they managed to achieve price parity with the airs. Matching the air’s performance/profile is an engineering problem that many companies have the ability to solve. It’s the price that no one can seem to crack at comparable specs.

    This is basically going to go the same as the last round. Apple will have the early game advantage, adn 6 months later two types of competitors will emerge: models that are somewhat worse in virtually every way while being only marginally less expensive (toshi r705, hello 1366×768), or models that are significantly more expensive for marginally better specs (sony Z, great screen but whoah price). There really isn’t any other outcome at that BoM price. If intel really wants to break open that market, they gotta get the starting price closer to what people are actually paying for windows notebooks, the $500-$600 range for the end price, maybe aorund $300 for the BoM. You still got to account for design, assembly, shipping, retail markup, operating system and profit in that.

    Also, is ANYONE taking atom seriously for slates? I mean, for nearly 5x the cost over tegra2 you get marginally better performance, lower battery life, and the ability to run an operating system that is highly un-optimized for a tablet. Good luck intel No one wants atom at this point.

      • Corrado
      • 8 years ago

      But what about a company like Samsung who MAKES the flash/misc? Why can’t they meet that price?

      • ImSpartacus
      • 8 years ago

      That’s an interesting thought, but I must call you out on the buying power comment. OEMs like Dell and HP move quite a few computers. Why would Apple’s buying power be superior to their’s?

        • sirsoffrito
        • 8 years ago

        Unlike Dell and HP, Apple simply has the economy of scale. Ultrabooks are not the only models on the market for these big name OEMs. Apple has an advantage in that they make so few models of computers, yet still sell so many, ultimately cutting costs.

          • ltcommander.data
          • 8 years ago

          That is probably true. Apple has focus in targeting weight, thinness, and battery-life and their models and supply chain are set up to achieve tat. Dell, HP, and other OEMs have to target the whole market and be everything for everyone, which spreads out their resources.

          The other issue is that Apple has long made significant capital investments on mundane things like the factories and tooling needed by their supply chain to make their devices. There was that report that the aluminum unibody design requires expensive, precision, low volume production milling machines and Apple has reserved most of these machines and their capacity. Similar investments were no doubt made for advanced battery technology, ultra-thin LCD screens, etc. There were those recent rumours that Apple gave billions to Toshiba and Sharp to expand LCD production capacity, but things date all the way back to 1999 when Apple gave $100 million to Samsung to build new LCD factories for Apple notebooks.

          [url<]http://www.crn.com/news/channel-programs/18809048/apple-invests-in-samsung-lcd-production.htm;jsessionid=DraKghSbSzboeNiSb2U+0w**.ecappj01[/url<] With the amount of cash Apple has on hand, Apple can continue to bankroll whatever equipment their outsource suppliers need to make their otherwise more niche devices efficiently and cheaply, as well as reserve long-term supply of the best components in terms of weight and power consumption which are enablers of a good ultraportable. This is probably an important initial barrier for anyone trying to come in and undercut Apple.

            • OneArmedScissor
            • 8 years ago

            “Dell, HP, and other OEMs have to target the whole market and be everything for everyone, which spreads out their resources.”

            …which come from the same factories as Apple computers.

            I think this discussion is trying to make something out of nothing. Why the comparison to Apple? The cheapest air is $999 and it just goes up from there – just like existing, similar computers from other companies.

            The problem is that Intel is telling them they need to get the prices [i<]below[/i<] $999, and into the mainstream. That doesn't mean $900. That doesn't even mean $800. People aren't going to suddenly jump all over them because they're $800 instead of $999.

            • sirsoffrito
            • 8 years ago

            Why the comparison? Because Apple has this product on the market *now* and its fairly clear it competes with ultrabooks. Apple buyers are willing to pay for it, but as you have already pointed out, mainstream notebook shoppers won’t. I don’t think that’s nothing. Not if Intel wants them to succeed.

            • Corrado
            • 8 years ago

            On top of that, other manufacturers said they COULD NOT meet the $999 price. Intel keeps pointing to Apple saying “You all talk about how overpriced Mac’s are for the same hardware, so heres the same hardware, and you can’t even MATCH them on price?”

            • ltcommander.data
            • 8 years ago

            “…which come from the same factories as Apple computers.”

            Which is kind of my question. Are they really the same factories/equipment?

            [url<]http://www.reuters.com/article/2011/08/17/us-sharp-apple-factory-idUSTRE77G0GK20110817[/url<] Just again today, Reuters is reporting that Apple is investing $1 Billion in a Sharp LCD factory. Apple doesn't just place an order for parts, they supply the cash to build/expand factory buildings and buy tooling to make those parts. It's doubtful Apple is going to pay Sharp or their other suppliers billions of dollars to buy the latest equipment to produce parts for Apple's competitors. Instead it looks like Apple is basically buying the factory space and equipment to be operated by their suppliers for dedicated Apple production.

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