Intel holds the key to a successful $200 PC: IHS

Intel holds the key to a successful $200 PC: IHS

Summary: Could $200 ultrathin, touch-screen PC be the shot in the arm that the PC industry needs to climb out of the tailspin it has found itself in?

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Can PC OEMs put together an ultrathin, touch-screen PC that will both appeal to consumers and come in at just $200? Analysts believe so, but chipmaker Intel holds the key to success.

And that key is almost older than dirt – cut prices.

"A price point that low seems far-fetched considering the mobile PC prices of today, with Ultrabooks and other ultrathins going as high as $1,000 or more," said Craig Stice, senior principal analyst for compute platforms at IHS. "However, the small laptops known as netbooks saw their prices reach down into the $200 range at the height of their popularity a few years ago, and a cost analysis of netbooks shows how such a low level of pricing can be used to support a no-frills type of ultrathin PC."

Stice arrives at this conclusion by examining the major components of a netbook on a third-quarter 2013 timeline, and pricing them out at $207.82.

"Hitting this kind of price point is not impossible for the PC industry, already a cutthroat market accustomed to razor-thin margins," wrote Stice on a statement to ZDNet. "Such a possibility was stated by outgoing Intel CEO Paul Otellini, who during Intel’s first-quarter earnings call in April made the bold prediction that touch-enabled, ultrathin Intel-based notebooks using non-core processors could be available by the end of this year."

Crunching the numbers, Stice found that Intel can control up to 33 percent of the total bill-of-materials cost for a PC just through the CPU and motherboard, and that a price break on these components would allow OEMs to drive down prices, which, in turn, would be further pushed down through competition.

While netbooks floundered because of their limited computing power, which in turn made them more suite to content consumption than creation, IHS believes that Intel's Bay trail hardware – assuming it delivers the promised power and excellent battery life – should give the PC market a "much-needed shot in the arm" and could ignite a new mobile PC market revolution.

While IHS's optimistic outlook is a valid one, there are a lot of ifs and buts. It relies on Intel delivering the goods with Bay Trail, Microsoft giving OEMs the chance to pick up Windows 8 licenses at a competitive price, consumers being interested in the form factor, the likes of Apple not disrupting the market with another 'must have' device, and Amazon not unleashing a $99 Kindle on the market.

Bay Trail is important to the PC market, but there's plenty of variables that could derail the juggernaut.

Topics: Mobility, Intel, Processors

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  • Not going to happen.

    Too many ifs. Intel could produce an SOC/Mainboard that included CPU/GPU/Bridge and with surface-mounted DRAM. But the memory/display/HDD/other categories are all at production costs, not even wholesale prices. And there's no way Microsoft is going to give away Windows 8 for $10 a copy, even a braindead version.
    terry flores
    • $290 for Win7 Netbook, not too far off point

      Amazon: Acer Aspire One Notebook 10.1" Running Win7 Starter
      320GB HD
      Only 1GB DDR3 RAM
      8 Hour Battery Life, Battery not Included.
      Patrickgood1
      • True, Walmart sells new ones at $249

        and it's as close to being bare bones as possible but still includes the necessary parts (including the battery). But they are certainly not stylish, ultrathin, or touch screen. And I would bet that most of the "profit margin" comes from the incredible load of advertising and begware on it, making barely usable without a complete clean rebuild.
        terry flores
        • tablets

          People would still buy a tablet at the same price point, and at this point, many are second generation buyers with software investments, cases, extra chargers and bt keyboards that only add to the value of a tablet purchase.

          Many, many people still want a laptop, but they are increasingly splurging on that, outside of businesses. The consumer market for PCs is just disappearing, the use cases and ecosystems support ios and Android and touch.
          solomonrex
    • Well, it depends

      If Intel and MS start to worry about their ultimate survival due to ARM's dominance in mobile, and with the mobile sector growing and the PC sector tanking, cut throat pricing is possible, by both MS and Intel.

      They can talk margins until hell freezes over, but at some point volumes matter.
      D.T.Long
      • Don't forget, MS has an ARM based OS

        so it's not much of a worry for them, so no cut throat pricing by MS is needed.
        William Farrel
        • I expect to see cut throat pricing by MS.

          For a $200 device, how much money can Microsoft charge for OS? I won't be surprised that OEMs would consider installing Linux if Microsoft charge over $25 for Windows. Low priced products are much more price sensitive than high price products; for a $200 device, $25 makes a lot of difference.

          Therefore, I expect to see cut throat pricing by MS.
          ac1234555
          • Linux

            No, they won't install Linux. They tried that once on the original Netbooks and it failed miserably. I'm not saying it was a bad OS nor that some people worked with it and weren't pleased, but the general public said 'What the hall is this!' and turned their backs on netbooks until Windows came on them.
            boomchuck1
          • Android

            Android is coming. Multiple vendors and Intel themselves made that clear. The Intel guy indicated that the $200 low end was going to be Android 'netbooks'. Who knows about chromebook, it's not a big seller, but it's the only netbook market now.
            solomonrex
          • Check your facts

            You need to do a bit of fact checking. Linux failed on netbooks because of Microsoft. When netbooks were released, Microsoft had only Vista. Microsoft brought XP back to life for the purpose of putting it on netbooks until they could render something better. While Linux may not be the best OS around, its failure on netbooks was due to Microsofts marketing.
            dmbeard
      • Intel Will Crush ARM

        The new Atom Dual Core Silvermont processor according to Intel kicks ARM's ass. This processor released earlier this month beats every other dual or quad core ARM processor currently on the market with a much superior performance per Watt ratio. (extremetech.com.com has a nice graph in their May 6th Silvermont article)

        The Atom thus far has only had a single core with inline instruction execution engine. Now the new out of sequence execution engine and 1MB cache give the Atom a big boost in performance.

        Intel has not yet released a new Architectures Optimization Reference Manual with the new Atom microarchitecture , so I do not know the details.

        Until now Intel has not put ARM in its cross hairs. This is a completely new microarchitecture for the Atom line. The first change in Atom's 5 year history.

        The 22nm lithography was first rolled out with the i7 and Ivy Bridge. It has taken until now to reach the mobile processors.

        When Intel rolls out their 17nm process Intel will be starting with the AtomZ2580.

        The mobile market has not made sense for Intel Their fab's production has a limit on the number of wafers. When they can turn a wafer into $300-$1000 i7 processors it makes little sense to go after the low end ARM market.

        NVIDA and Qualcomm are beginning to sweat because ARM is stalled on the 28nm lithography of Taiwan Semi (TSMC) and Global Foundry. TSMC will not get their 20nm FinFET into product until next year and their 16nm in 2015.

        Intel has been shipping 22nm processors for oven a year now with a proven production capabilities.

        Intel is scheduled to begin shipping 14nm Broadwell prototypes in the next couple of months with a new GPU. These Broadwell Atoms will put desktop performance in mobile devices with very acceptable battery life.

        The unusual step is for Intel to use the new technology in the Atom mobile processor line first. They will also roll out some 4th Generation Core processors as well. But Atom will not have to wait a year for the new process to trickle down.

        As it appears, Intel has more than "caught up" with ARM and will soon have more than a two year lead on the two big ARM foundries (TMSC and GF).

        Intel's R&D is now working on 10nm for 2015 and 7 & 5nm not too long thereafter.

        Bye-Bye ARM!
        Patrickgood1
        • Time will tell

          Why are you so quick to make wild proclamations based on a company's own (promotional) statements?

          Would it not be prudent to wait and see?

          By now, life experience should perhaps have taught you that in the absence of compelling evidence, predictions about the future are very risky and will often make you look foolish.
          D.T.Long
          • Actually I Read About Intel From sources I Respect.

            Having been an IC designer in the 80s, I follow semiconductor technology. I know some some of the players. I lived through the history of Silicon Valley.

            I am not afraid of looking foolish. I based on what I know about transistors and microarchitecture I can come to a fairly solid conclusion.

            ARM, in my opinion does not have the microarchitecture to sustain their market share even if the foundries caught up to Intel transistor technology.

            ARM has been around since 1985. The work started on ARM at VLSI Technology. Around 1985 I was at VLIS's design center in Richardson TX designing an ASIC on a Mentor Graphics CAE workstation for IbM's first ever Ethernet adapter (featured on the cover of PC Week mag).

            At that time I was employed at Ungermann Bass with many ex-IBMers. Ralph Ungermann was originally with the Intel 4004 and 8080 development teams. Ungerman and Fred Faggin left Intel and founded Zilog and created the very successful Z80 processor. When Zilog sold to Exxon, Ungermann and Charlie Bass founded what became the largest supplier of Ethernet in the mid 80s. IBM gave U-B a fair amount of development projects. My first project was working on IBM's Token Ring MAC layer chip. Next I did one of the chips in a Token Bus 802.4 chip set.

            Back to ARM
            TSCM and GF (ARM Foundries for NVIDA, Qualcomm Broadcom, Altera and AMD) are lagging Intel in transistor technology and in getting new lithography into production. Up until now ARM had no competition from Intel. Intel was not going to waste wafer real estate on $10 processors.

            Intel had acquired DEC's strongARM processor in a lawsuit settlement. strongARM became Intels Xscale processor which was sold in 2006 to Marvel Semi another Fabless ARM vendor that uses TMSC for foundry work.

            ARM uses a RISC Instruction set vs. Intel's CISC. Intel's microarchitecture is leaps and bounds above ARM. Given a RISC processor rrequires fewer transistors. This is why ARM has low power requirements.

            To give you an idea of the difference in complexities based on number of transistors
            ARM Cortex-9 26,000,000
            Atom N270 47,000,000
            i7 960 731,000,000

            Intel has processors with well over a Billion transistors.

            I also knew IBM's Dave Brady (Mr. Crl-Atl-Delete) who was one of the original 12 engineers that designed the PC in Boca Raton (I lived in Boca). He told me that they wanted to use the Motorola 68000 processor but IBM Marketing forced them to design in Intel because the Intel 8088 was 3 months ahead of Motorola.

            It was IBM that made Intel what they are much in the same way they made MS what they are. I was told by an ex-IBMer at U-B that IBM had to sent a semiconductor team to Intel and teach them how to make a wafer because Intels yield per wafer was so poor they could not keep up with demand.

            Another prediction, kind of:
            MS "should / could" have full blown Win 8 running on WP phones, capable of running native Windows executables within the year. This may be just wishful thinking. I would like to port existing and develop new Mobile Apps that run on desktop and mobile phone with one compilation.

            The new chips coming from Intel are looking very good and their graphics are getting much stronger.
            Patrickgood1
          • Thanks

            For the info Patrick very informative!
            rickscr
          • perf vs. profit

            Trouble is, Intel can't charge as much or Arm still wins. Intel's performance doesn't matter to Samsung and Apple, only their profit margin. They'll keep ARM until Intel sweetens the deal. Considerably.

            Intel's great profits based on weak OEMs are a thing of the past, because Samsung and Apple have their own chips and everyone else is dying. AMD might have captured the last significant consumer market with the consoles. It's a sideshow now, but in 5 years, it might be everything non-ios and non-Samsung. Who knows?
            solomonrex
        • Agreed.

          For me, it's not just the performance/watt ratio, but also the capability that comes with it when bundled with a full desktop operating system or the Core and Kernel of a full PC. Use any USB device, Full Desktop Web-browsers, "TRUE" enterprise software, AAA PC games, etc......
          Don't fear the future
        • Don't look at ARM, look at Xilinx

          The Zynq FPGA with a dual-core A9 offers great power [for a price]. The M4 Cortex chips are for the economy set: look to STM and TI for sales, doubt they'll be stopping production any time soon.
          The REAL thing about that price list is: looking at a laptop [notebook, whatever] as a series of modules, rather than a single "take it or leave it" completed product [which many people are leaving].
          Laptops can usually already upgrade memory and hard drive, other than some Apples. If you had a pretty good laptop, BUT were offered a plug-in replacement LCD with LED lighting and Retina resolution - would you take it? Better graphics? Different CPU?

          It's high time that laptops were standardised and modular. Insisting owners replace an entire system in one go is old thinking that can't be afforded any more.
          alan_r_cam
          • Retina Resolution??

            Yeah I bought into the Apple Retina Hype.

            I had just purchased two Dell 24" LED monitors . They looked so good I texted my daughter (an Apple Fan) telling her how the new monitors looked almost a good as the iPad display.

            Until I held the iPad up side by side. The iPad looked like crap in comparison.

            I then kicked myself in the ass for buying into Apple's Retina hype. I believed Apple. Never again.
            Patrickgood1
        • Atom more competitive, but 5-7 nm chips aren't possible

          The new Intel Atom processors certainly will give ARM processors a run for their money on both performance and power consumption.

          However, I would bet a large amount of money that we'll never see 5 or 7 nm shrinks. The problem, in simple terms, is that at this scale, the 'lumpiness' of individual atoms comes into play and electrons leak out in the gaps between them. I wrote an article about this in The Register several months ago. It was based on a presentation given by Bernie Meyerson, IBM VP of Innovation, who has been researching and experimenting with process technology for decades now.
          aurora123
          • Actually Intel's Roadmap Has 7 and 5nm Lithography

            A year ago May 2012, Intel released a new road map for their 10, 7 and 5nm process scheduled for a 2015 release. I do not know of any updates to that schedule. Intel hit the schedule for the 22nm Silvermont announced at that time. Airmont 14nm is on schedule as well.

            In their May 6th announcement Intel said:

            Silvermont enables ~3x peak performance or the same performance at ~5x lower power over the current-generation Intel® Atom™ processor core.
            Patrickgood1