Supply chain dubious over Ultrabook price drops

Sources in the supply chain  think vendors will struggle to meet the mainstream Ultrabook’s price points being touted by Intel for the second half of 2012.

Intel’s Taiwan manager Jason Chen said that the chip maker was confident of knocking down the unit price to between $699 and $799 during the second half of the year.  This would see Ultrabooks stay on course for the 40 percent market penetration as prices drop “in the second half”, Chen said speaking with the Taipei Times.

This relies on making sure that production costs can be lowered, and supply chain players appear less convinced of Intel’s ability to wave its magic wand.

According to DigiTimes, sources in the notebook supply chain reckon that production costs will make price dips on new models difficult.

Intel has been engaging actively with its supply chain to attempt to reduce the component costs, but sources say that vendors are still not seeing enough cost reduction on SSDs, chassis, and indeed processors, that are necessary to reduce unit costs.

The sources muttered that retail prices are more likely to end up between $999 and $1,299 for the majority of models.

Costs will also be kept high by the move to touch screens on certain models, following the release of Windows 8 later this year.

Intel has indicated in the past that it is working with the panel supply chain to help smooth over any problems, and most would expect to pay a premium on touchscreen models.