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

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?

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.

Show Comments