Market research firm IHS believes the chip giant could reinvigorate the PC industry--if it's willing to sacrifice its own margins.
According to IHS, Intel can control up to 33 percent of the total bill-of-materials cost for the PC through the central processing unit (CPU) and motherboard. If Intel decides to provide a price break for just these components, PC original equipment manufacturers could see their margins improve, allowing them to drive down prices for the retail market. With PC competition so fierce, it takes only one PC manufacturer to find a price point that sells—and others are bound to follow suit shortly afterward, IHS said.
Intel could also be instrumental in introducing an even more powerful ultrathin-type mobile PC than netbooks, IHS said. Intel’s next-generation Atom processor, codenamed Bay Trail, has the potential to deliver a performance boost that will clearly separate the traditional netbooks of old from the new generation of mobile and ultrathin PCs, according to IHS.
Netbooks—which after a short run as a popular type of computer are now all but extinct—had limited computing power and were regarded more as devices for content consumption. But, according to IHS, the new and more economical ultathins being considered would offer considerably more power and be categorized as content-creation devices. Such a perceptible enhancement could increase their chances of survival in the marketplace, unlike the netbooks, IHS said.
A key factor in whether or not this will happen is Bay Trail, which Intel says will move from two processing cores to four to provide beefed-up performance, IHS said. Along with Bay Trail, Intel’s own high-definition embedded graphics and an extended battery life for improved power will yield a processor bearing similar performance to the chipmaker’s family of Core processors, IHS said. All these traits could be part of the new, less expensive ultrathin being projected.
For the PC industry, such an ultrathin notebook retailing for $200—if Bay Trail delivers what Intel claims it will—would be a much needed shot in the arm, according to IHS. It could spark the mobile PC and stop it from losing more ground to tablets, according to the firm.
In addition to Intel being willing to sacrifice its own margins in order to make this all happen, PC makers must also be willing to sacrifice even more of their own margins in exchange for the greater amount of volume that they seek, IHS said.
While the scenario proposed by IHS is hypothetical at this point, it's not entirely out of reach, according to the firm. IHS is already forecasting a strong second half for PC sales. Add in the potential for lower-priced next-generation ultrathin systems, and the PC industry may finally have a valid competitor to lower-priced media tablets, according to the firm.