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back to article Intel cutting prices, taking on all comers in fondleslab market grab

Intel is so desperate to gain a foothold in the fondleslab market that it's willing to slash its margins in exchange for market share, supply-chain sources claim. Industry insiders have told Taiwanese tech-news rag DigiTimes that Chipzilla has been cutting prices and offering marketing subsidies to tablet vendors willing to …

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Windows and Intel together in a tablet

What is the point of that? We know that is not working.

Intel has even said at least 60% of their effort will go to Android and realistically this should be over 90%.

Their new tablet chip technologies promise to be interesting this holiday season, but we will have to see if the experience is good.

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Re: Windows and Intel together in a tablet

Intel and windows in a tablet works well.... its just not gained much traction against the cheaper, more abundant android invasion, or the expensive Apple alternative...

Give it time... apple, android and windows will all end up taking a similar share of the tablet market.

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Facepalm

Re: Windows and Intel together in a tablet

What's the point? Pane relief

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Anonymous Coward

Re: Windows and Intel together in a tablet

"We know that is not working."

Primarily because Intel didn't have a product that could compete on battery life, and Microsoft didn't have a touch optimised OS. They do now - and people are starting to realise the significant limitation of Android or IOS compared to Windows.

I expect that Wintel tablets will own the premium and midrange ends of the markets eventually. I note that BMW, LVMH and Coca Cola for instance have already made orders for the Surface 3 as an example from the premium end.

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Intel can buy market share for as long as they want

But the moment they try to reclaim their standard margin, the market will return to ARM. If Intel believes a small advantage in price/performance will swing the Android market from ARM to x86, once they quit subsidizing it will swing back to ARM. There isn't any CPU lock in as there was with Windows.

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Re: Intel can buy market share for as long as they want

They need a certain installed base to motivate Android developers to target them with native code. They can buy this critical mass. It could work out for them.

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Re: Intel can buy market share for as long as they want

Nearly true.

But Intel are NOT subsidizing their x86, just reducing the margin. The Intel Tax has ever been higher than Apple or Microsoft Tax on PCs. Otherwise AMD couldn't have got to market at all.

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Re: Intel can buy market share for as long as they want

Tell the "no CPU Lock-in" story to the people who made MIPS, DEC Alpha and PowerPC ... All of which could run Windows at some time.

And Intel can churn out their new "cost reduced" Bay Trail on fully depreciated 22nm Silicon for about $3 a chip. They can retain 50+ percent margin while selling them for $7.

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They ARE subsidizing x86

Google Intel and "contra revenue". They're paying OEMs to use x86 in tablets.

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Re: Intel can buy market share for as long as they want

You can't compare ARM and Intel. Intel is a full service, finished goods manufacturer. ARM is an intellectual property holding company. ARM has some real talent, good product and are a shining example of how the patent system was meant to be used, but there's zero direct financial comparison between ARM and Intel products.

The most advantageous selection isn't just cost, it's based on how you run your business. With Intel it's a phone call and your order arrives shortly thereafter in trays, tape or whatever custom package your assembly equipment uses. With ARM you get your license then go find somebody to manufacture the processors and handle any custom packaging requirements and logistics.

Which you choose depends on how you operate your business. When I was buying huge quantities of processors Intel was my default choice because the actual business aspects of dealing with a single source vendor made it cheaper overall to deal with Intel, even though unit pricing was considerably higher than either AMD or an ARM licensed solution.

Choosing component vendors is far more complex than simple unit costs.

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Anonymous Coward

Re: Intel can buy market share for as long as they want

Windows already has million of developers - the Android ones are of no particular must have value.

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Smart weaning !

As already said, this is what Intel are famous for.

Wean them early to later treat them all mean.

Saying that, they did come very unstuck with that expensive $300 Ultrabook Chipset.

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Windows

Ok guys, ok. Why don't we look at what is actually happening here.......hmm?

"Intel is so desperate to gain a foothold in the fondleslab market that it's willing to slash its margins in exchange for market share, supply-chain sources claim."

Let us rewrite this a bit. "Intel is at last experiencing real competition and as a result is having to cut their prices to non-cartel level". Furthermore, Redmond has realised that the "good times" can't not roll for ever and is doing the same. Isn't this how the market is supposed to work? (at last, but hey!).

No, this does not mean your favourite hate-figure (your choice, I have better things to do with strong emotional responses that get that exercised over the future of Microsoft, Intel, Google, Cupertino - whatever) is likely to file for chapter 11 bankruptcy protection anytime soon however much your wet dreams are driven by that wonderful image.

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Re: Ok guys, ok. Why don't we look at what is actually happening here.......hmm?

And they can tell the "Illegal subsidy" story to the WTO judge while:

The Chinese Fabless outfits burn through their 0% government "loans".

GF burns through the Sheikh of Abu Dhabi's limitless oil billions.

TSMC prints stock certificates for suckers to fund its expansion and Samsung's Chaebol masters play their usual accounting games.

Level playing field ????

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Paris Hilton

Shame innit?

It seems a shame that the two most successful organisations at making computing available to all missed the first opportunity to do so on a wide basis.

But heck - Ms and iTel will catch up purely on the amount of reserves they can throw into it?

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Anonymous Coward

"Microsoft needs new tablet partners just as badly as Intel does, which explains why it, too, has been going all-out to slash its prices for hardware OEMs – even going as far as to offer a new version of Windows that will cost nothing for makers of slabs with screens smaller than nine inches."

The problem Microsoft has, they compete with their partners. They have the Surface line and now with the acquisition of the Nokia handset division, they can be competing with their "partners" in two markets. With Nokia, Microsoft has even more resources at their disposal when it comes to hardware. Microsoft is killing their own partners. Take HTC, the last WP handset they released was a year ago. The fact is, Nokia was the strategic partner of Microsoft and all of their other partners were relegated to playing second fiddle. Why would any company want to partner with Microsoft on a tablet or a phone? Microsoft can either sell the hardware at cost, give the OS away or both when they make the device. Their partners doesn't have this luxury.

The fact is, when WP was first released, Microsoft should have been giving it away for free. It is too little too late as Microsoft is going down an empty road alone.

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> The problem Microsoft has, they compete with their partners.

One of MS' problems is that they have partners.

Apple have complete vertical integration and reap profit from all parts.

Samsung have everything except the software stack (Well some of that too - but the OS is free).

MS's problem is that they are trying to sell an OS in market where they don't vertically integrate and they don't have hardware which will need replacing. The vendor OS already does most of what we want. So Intel wants a slice of profit, the Asus wants a slice of profit and MS wants a slice of profit. Instant 1/3rd profit for MS. Plus Asus looks at Intel and wonders if component prices will be hiked; looks at MS and wonders if OS prices will be hiked and thinks it would rather have an ARM license and Android, with or without Google. Samsung does the same thing and thinks a Tizen alternative is also a good plan. There are too many powerful players and too much investment at stake to rely on other, fickle companies.

This is why MS is likely to lose in the market: On the demand-side, no-one wants a phone locked down like a laptop SOE (i.e. BYOD fail - companies will have to buy all their own phones again); on the supply side, companies like Samsung want certainty and control, which ARM brings but Intel and MS do not.

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Anonymous Coward

Re: > The problem Microsoft has, they compete with their partners.

Using your thinking then, Microsoft should partner with Intel and dump Surface RT and make WP x86 based. This is where Microsoft is most comfortable and would make it easier for devs to write code; all x86. WP does use the NT kernel.

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How far can Intel slash margins?

Intel has always been a high margin business.

They put in an enormount amount of IP development, then cook a tablespoon of sand and sell it for a few hundred bucks.

ARMs tend to be very cheap. For example, the Allwinner A10 (http://en.wikipedia.org/wiki/Allwinner_Technology#A-Series) dual core, VPU SOC costs around $7, with quad cores A10 nudging the $10 mark.

It is not at all clear how they can be beat that and still put numbers in front of the stockholders that won't start a riot.

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Anonymous Coward

target market is China – .. what .. Tim Cook calls the "junk part of the market"

Or to spin it another way, "where the majority of people are not stupid enough or rich enough to pay Apple's inflated RRP"

From the time that I've spent there I learnt one thing, they do sell crap, but there is also a lot of cheap and innovation products, in 2008 I brought a media player for 500 yuan (£50), which had a 6" screen and does just about everything my current tablet does. The same bit of kit on Western shores would have cost £500+!

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Re: target market is China – .. what .. Tim Cook calls the "junk part of the market"

>The same bit of kit on Western shores would have cost £500+!

Because the cost is not in the production but in the selling. This will be the West's downfall. We have already seen the high-street retail struggling because retail and marketing is too expensive.

The problem is over-production. We can saturate the market so now we have to reduce quality to trigger re-purchases and we have to spend millions stealing sales from other products. This is not sustainable. We need smaller suppliers who can grow with good ideas, not massive suppliers desperately seeking some way to foist "new and improved" on us to cover their marketing budgets.

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E 2

I have two laptops, an HTPC, a gaming rig PC, and a Samsung S4. I scoffed at tablets for a long time.

Then I bought a tablet on a whim... since then I don't turn on the PCs and laptops very often.

Intel may well see much of it's retail x86 PC market simply dry up and blow away. If it fails to get market share in tablets (and I suppose cell phones) Intel may become the next fail - a la Microsoft in the server market.

Apple has started designing and fabbing it's own CPUs for a good reason.

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