Intel puts the freeze on notebook prices, ponders Calpella delay
By Joseph L. Flatley 
posted Feb 10th 2009 10:41AM
posted Feb 10th 2009 10:41AM
We know what you're thinking. A global economic downturn can only mean one thing: savings! Perhaps, but if you were holding out for a price break on that new Intel-powered laptop, it looks like you may have a little longer to wait. According to DigiTimes, Intel is notifying its partners that it won't be cutting notebook prices before the end of May. If the report is correct, the company will start reducing the price of some notebook CPUs (including the Core 2 Duo T9600) by 13-40% in June, adjusting the launch schedule of its Calpella platform "based on its partners' inventory status and market demand." You know what that means -- no new processor, and no price cuts, not until manufacturers get rid of their current inventory. And it looks like Intel means it. Now go clean up your room or you won't get any dessert.[Via SlashGear]
Well Phooey....:-(
All but ensures that I won't buy a laptop this year... way to go and slow down the market even further Intel by announcing such nonsense.
I will only clean my room if dessert is an 8 core 4Ghz i7 extreme for laptops, otherwise sod it, I only really need a Geiger counter to find some relatively clean socks, either that or switch the light off and go for the pile that glows the least.
Global economic downturn doesn't mean deals it means stuff gets more expensive.
Memory, Cpus etc. are cheap through mass production if less are made then they get DEARER
Local currency can also devalue which means imports are MORE expensive.(happening in the UK at the minute)
No-one at Engadget really understand even basic economics do they ?
While you are correct in your reasoning, there is also something else to be considered, which makes your opening statment invalid:
Intel makes a profit on each CPU. They can reduce the profit they make to lower the cost and therefore sell more units, and perhaps ultimately make more money. But the amount of profit they make and volume increase expected have to come out just right. Apparently Intel doesn't think that they will sell enough extra units by lowering their profit margins to make more money (If AMD could put out a decent mid-high end processor again maybe that wouldn't be the case...).
So price reductions can, and should be expected in a poor economy...on luxury goods. The staples are what should generally increase in price, because you can't live without them. Fortunately, we have a wide variety of options and much better supply chain control, so we don't see very drastic increases on them like we did in the real Great Depression.
The bottom line is, the economy is really friggin' complex, and there are almost always exceptions.
"They can reduce the profit they make to lower the cost and therefore sell more units, and perhaps ultimately make more money."
In a slight slowdown in a specif segment probably. When everything is down across the board and sales are way off lowering prices is just leaving money on the table.
Since the CPU is only part of the cost of a laptop (I'll be liberal here and say that it's 20% to illustrate), lowering it's cost by, say 25% would only lower the cost of the laptop by, 25% of that 20%. If the laptop costs $500 to build, and the cpu costs $100, with the 25% discount that CPU costs $75. The laptop now costs $475. At retail this Laptop probably costs $625 before and $594 after. Intel is smart enough to know that in this market, the price reduction that finds it's way to the consumer is probably not enough to sell the additional quantity of laptops required to make up the difference for the price reduction. Don't forget that this example is also extreme. The typical cost of a laptop CPU in quantities that manufacturers purchase them is less than 20% of the cost of the laptop in most cases, AFAIK.
Intel is smart to not lower the prices at this time, since they would most likely just eat the reduction. The only good reason for them to lower the price is if AMD significantly cuts prices and starts gaining significant market share. Then Intel will need to respond.
I worked as senior technical support for HP.
We had a LOT of people call in using laptops for work purposes.
I would judge up to a third of calls I handled were for professional use of some kind and we only dealt with consumer models.
The models they bought were consumer models (mostly value model systems).
There is an entire department for business models of notebooks.
They usually wanted the system fixed immediately and expected some kind of a loaner as well.
I have to wonder how many of them wouldn't need a repair service of some kind if they didn't use their systems for person use as well, though.
It works out for me I think. I was planning to upgrade anyway when Windows 7 launched.
Nehalem.... NOOOOOOOOO!
Who knows, maybe AMD cas use this as an opportunity to undercut Intel. Even if they take a loss (it's not like everyone else isn't), they might be able to really push their brand out there to the masses (you know, the people who don't understand what a CPU is and usually end up buying Intel for no other reason then they've heard the name before) and that could help set themselves up to be better competition once the economy stabilizes
This is why we need competition...
Because with so many laptops currently in use, it is inconceivable that anyone would need to get a natural upgrade and ditch their 4 year old POS.
I love my 2007 Modsel. Best car on the road.
The old Intel fights back - even as the new Intel awaits its turn ! Please, dear old Intel, don't cut the prices. Raise them further, if you can. Embellish your chips with gold plating and crystals. Create a high-value chip market. Target the rich and famous ! Cheapos can line up for netbooks - driven by ARM or (surprise!) Atoms and Ions or such poor silicon.
It's simple: No discounts on the current chips until a few months before the new ones come out. If discounts start in May, we can have the current models for cheap in the summer and i7 notebooks about 3 months later, like August for HP and October for Thinkpad. If there's too much inventory of the old stuff the discounts will continue until it's gone and the i7 release date will slip accordingly.
If Microsoft has any sense they'll ship Windows 7 in a big "seven fest" dual launch.
Yarg! I was planning to get a Calpella CPU! Now I feel like getting an AMD CPU simply out of spite :/.