Intel promises sub-$100 tablets, has some convincing to do

Intel-logoIntel hasn’t had much luck with tablets. Very few devices have Intel innards and most of the ones that do are low-volume Windows 8 tablets, accompanied by a nasty price tag. However, there have been some moves towards cheaper Intel tablets in recent months. A number of vendors has rolled out Windows 8 products powered by Atom parts with relatively decent prices.

Now Intel is taking it a step further by promising sub-$100 tablets by the end of the year. It sounds a bit like a general saying his troops will be home for Christmas and here is why. Intel just has a terrible track record when it comes to making any promises involving pricing. This is a relatively new thing for Intel, usually it tried not to make any predictions at all, but over the past couple of years it made a few, and they were all dead wrong.

It started a few months after the fist Ultrabooks were announced. The press pounced on Intel, demanding to know how it plans get a lot of traction on skinny, overpriced notebooks with prices starting at $999. Intel’s response was pretty clumsy. It promised to do its best to bring the prices down to $699 by the end of 2012, then $599, depending on who was on stage. Then it started making similar promises about hybrids and x86 tablets. All the promises had one thing in common – for all intents and purposes none of them came true. To be fair to Intel, some of them were quite vague. Saying $599 Ultrabooks will appear sooner or later isn’t much of a promise, put pinning down a date is.

Speaking at IDF, Intel CEO Brian Krzanich said the company’s new Hallway tablet platform will “go below $100 by Q4 2013” and to be honest we are not sure we believe in Intel election promises anymore. There are practically no big brand Android tablets with anything close to that pricing at the moment.

There are however plenty of white-box tablets priced at $99 or less, but most of them are rubbish, as they feature antiquated chipsets, low resolution screens and simply don’t have a lot going for them. It is relatively easy to come up with interesting products in the $130 to $180 range, but going down to sub-$100 isn’t as easy. A quick glance at the BOM of low end tablets reveals that there’s really not much room to cut corners and pinch pennies without seriously compromising the product, but let’s leave the geeky details out of this. Even if it practically gives away Bay Trail parts at cost, it is highly unlikely that hardware makers can come up with compelling designs at $99 or less.

The other problem with Intel’s promise is that it sounds pointless on another level. Chasing others to the bottom doesn’t really sound like something the world’s leading chipmaker should be doing, unless it considers MediaTek, Rockchip, Allwinner and other low-cost SoC makers as direct competitors. It just looks bad and if some partners really come up with dirt cheap Intel based tablets they will just hurt Intel’s brand, because they are bound to be terrible. With today’s component prices, the only way Intel could come up with truly good sub-$100 tablets by the end of the year is if it subsidizes them, quite heavily. However, that would cost plenty of money and it would not address the primary concern – what on earth is Intel doing in that market segment to begin with?