Intel held its first quarter earnings call for 2013 on Tuesday, and the Q&A with analysts afterwards was full of bold declarations about how cheap touch-enabled PCs and other Intel-loaded touchable gadgets were going to get.
Intel executives love to talk about how the next generation of PCs powered by Intel processors is going to be surprisingly cheap. And there’s no better time to throw around price predictions than after a round of dismal reports about the future of the PC.
The most interesting price prediction came from outgoing CEO Paul Otellini who said touch-enabled laptops could get as low as $200 by the holidays.
“If you look at touch-enabled Intel-based notebooks that are ultrathin and light using non-Core processors …Those prices are going to be down to as low as $200, probably,” Otellini said. Otellini’s $200 price prediction followed earlier statements from both Otellini and Chief Financial Officer Stacy Smith claiming Bay Trail-powered devices would get into the $300 range. Bay Trail is Intel’s Atom system-on-a-chip that’s due later this year.
“Because of Bay Trail coming into the marketplace, you’ll see touch-enabled thin notebooks with really good performance that are hitting kind of $300 price points,” Smith said.
Ultrabook prices predicted to fall
The pair also reinforced statements that Ultrabooks would be priced less than $600 in time for the holidays. “As we get into the Christmas selling season, our expectation is you will see touch-enabled Ultrabooks that are $499 and $599 pretty commonly out there—$599 commonly, and $499 as kind of special SKUs,” Smith said Tuesday.
Before getting too excited about the future of touch-enabled PCs, keep in mind Intel is the same company that predicted the first generation of thin and light Ultrabooks would be priced under $1,000. That’s a price point that early Ultrabooks largely failed to meet, although there were some priced as low as $900-$999.
Intel may really like it if PCs got priced as low as $200, but the company’s dreams for PC pricing have recently ended up in conflict with the real products that computer manufacturers release.
While Intel is talking up the future of the cheaply-priced touch PC and the promise of improved sales, market research analysts are painting a pretty dismal picture for the traditional personal computer.
Earlier in April, research firms Gartner and IDC both said worldwide PC shipments hit record lows during the first three months of 2013. IDC set the drop at 13.9 percent, while Gartner said the dip was around 11 percent. (Disclaimer: PCWorld and IDC are both owned by International Data Group.)
If the figures prove to be accurate, Intel’s predictions of lower prices may help buoy declining PC sales as both Gartner and IDC pointed to price as a major contributing factor—along with the undesirability of Windows 8.
Blame game
Blaming the lull in PC sales on high prices for touch-based PCs is a theme we’ve been hearing for months. In January, PCWorld reported that Windows 8 notebooks didn’t sell well during the 2012 holiday season partly due to price. Then, in early April, we saw Windows 8 hybrid and tablet prices slashed, Windows RT device pricing also fell during that time, and we even caught some Windows 7 PCs priced higher than their Windows 8 counterparts.
On Monday, financial news site MarketWatch went so far as to say PC prices were hitting “Black Friday-style deals.”
All of this cheaper pricing, we’re told, should help prop up the sagging PC market, especially later in the year when touch-based PCs running Windows 8 become more commonplace. But what if that’s not the case at all? With PC computing power and speed hitting a wall, what if all the excitement has finally gone out of the PC market as everyone turns to tablets and smartphones for everyday computing?
What if the PC really is turning into the microwave: just another home appliance you replace only when it breaks down? Forty percent of the global PC population, after all, is still using Windows XP, an oper
ating system that has seen three major refreshes since XP debuted in 2001.
Intel may have a tough time predicting prices for future PCs but, even if the company’s predictions hold true, cheaper PCs may not be enough. There’s no guarantee, after all, that holiday shoppers will prefer a $200 Windows 8 laptop just because it has a touchscreen. Not when you can pick up an equally priced Android tablet such as the Nexus 7 or Kindle Fire that can fit in your back pocket.