Report: Ultrabook Prices Will Drop 5-10 Percent by Q1 2012

By Wesley Fenlon

A Digitimes report claims supply chain makers will lower prices by up to 10 percent in the first quarter of 2012--just in time for the flood of Ultrabooks releasing next year.

Intel pushed so, so hard to keep Ultrabook prices in three digit territory, and their efforts worked: most of the Ultrabooks released in the last quarter of 2011 have been priced at $899 or $999. Success! Right? While market analysts keep on predicting that Ultrabooks are the future of the PC industry, early sales haven't been so convincing. According to Digitimes, those prices are actually going to fall in a hurry.

The site's sources in the Taiwan supply chain claim prices will drop 5-10 percent in Q1 2012, with an extra $100 coming in to PC makers from an "Intel marketing subsidy." With as many as 50 Ultrabooks expected to be on display at CES in January, we could be looking at a flood of $799-$899 Ultrabooks on the market early next year.

Digitimes' report lines up with Acer's predictions for next year: the company expects to hit its target of 250,000 shipped Ultrabooks in 2011 and sees prices in 2012 sticking in the $799-$899 price range. The company predicts Ultrabooks could cost as little as $499 in 2013.

To reach that kind of price, component costs will have to lower dramatically between early 2012 and 2013. Digitimes writes that 13-inch Ultrabooks with SSDs cost about $690 in parts, $100 in OEM costs and $150 in marketing and distribution. That adds up to $940, making for a mighty thin profit margin on current systems. If those numbers are accurate, PC makers will have to cut corners next year--perhaps sticking with spinning disks instead of switching to SSDs--to hit that 10 percent price drop.