Intel Scoffs at 50 Percent CPU Price Cut Proposal from Ultrabook Partners

Posted 08/16/2011 at 7:02am | by Paul Lilly

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Notebook players may have just pulled an old negotiation tactic on Intel, and won. Here's what went down. According to reports, notebook makers sought out the Santa Clara chip maker and demanded that it cut Ultrabook CPU prices in half. That sounds like an absurd demand, but rather then tell its partners to jump off a bridge, Intel countered with a 20 percent discount for first-tier notebook players.

See what they did there? Had they asked for a 20 percent discount to begin with, Intel might have come back with a 5-10 percent counteroffer, or refused the demand outright. Instead, first-tier notebook makers, which are so far the only ones committed to building Ultrabooks, get a significant price cut on high-end CPUs.

Bear in mind that these aren't Atom chips, but Core i5/i7 Sandy Bridge processors. According to news and rumor site DigiTimes, the price cut means Ultrabook makers will now pay $317 for Intel's Core i7 2677 processor (1.8GHz, 4MB cache), $289 for the Core i7 2637 (1.7Ghz, 4MB cache), and $250 for the core i5 2557 (1.7GHz, 3MB cache). On top of the price cut, Intel has already committed millions of dollars in marketing money to help promote the Ultrabook concept.