Intel Has Been Subsidising Chromebooks, Now It’s Going To Stop

/ 3 years ago


If you’ve ever wondered why Intel-based Chromebooks have been so cheap over the past year then you may be fairly surprised, or maybe unsurprised, to know it has been because Intel was subsidising them. For anyone looking at Chromebooks the obvious options are Intel based ones since ARM based ones tend to be a lot more expensive, but of course that in itself makes no sense: ARM CPUs are broadly always cheaper than Intel ones. The example in question is the newest Acer Chromebook based on an Intel Haswell Celeron which costs just $199 while Samsung’s Chromebook based on the ARM Exynos 5 processor costs $279.  Intel has apparently been offering its Haswell Celeron mobile CPUs to hardware partners, like Acer, at an “extremely cut rate” allowing vendors to create high performance Chromebook devices at a price point that “should not be possible”.

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It has been nice while it has lasted but apprently the end of Intel subsidies is near. Intel is rumoured to be withdrawing its subsidy program in the near future and will try and push hardware vendors towards using its newer Bay Trail chipsets and SoCs instead. This allows Intel to offer similar price points, but obviously with much less performance. Intel’s Bay Trail platform will be competitive with similar ARM based Chromebooks but neither will be as fast as current Haswell Celeron based Chromebooks. The only benefit of Bay Trail is expected to be slightly better battery life of around 11 hours compared to the current Haswell Celeron 9.5 hour battery life. So if you’re in the market for a Chromebook, buy now before the subsidies vanish!

Source: techtainian

Image courtesy of Liliputing

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7 Responses to “Intel Has Been Subsidising Chromebooks, Now It’s Going To Stop”
  1. P0l0nium says:

    Intel are NOT subsidising Bay Trail in Chromebooks and they never were.
    BT is 100sqm. 600 die per wafer , yield 95%, wafer cost $3000, die cost $5.25.
    Add $1 for assembly/test and they can sell BT for $10 and still make $3.75.

    They may be selling near cost and paying for NRE but they are NOT “subsidising”.

    • No. Intel are not subsidising Bay Trail Chromebooks, at no stage in the article does it say that or even imply that. The article states that Intel are selling Haswell Celerons at an “extremely cut rate” (or Intel are subsidising Haswell Celerons), sure they might still be making a profit on it but that doesn’t mean it’s not a subsidy. I think you should refer to the definition of a subsidy if you think Intel selling Haswell Celerons at extremely cut rates (cost/near cost) isn’t a subsidy. They are selling it at below market price which makes it a subsidy, or you might call it dumping instead but either way there is a subsidy to the price element.

      • P0l0nium says:

        So they were making a profit … right?? but they’re still “subsidising” them.

        Tell us how MUCH the subsidy was …. minus $1??

        • I’m no economist but the way I see it is that a subsidy is the term used to describe a direct payment, or cost reduction (indirect payment), that reduces the cost of production for a producer. Intel is offering a subsidy to the producers (chromebook manufacturers) in order to reduce their costs of production. What Intel is doing is akin to a government lowering tax on a certain industry. In both cases profit is still made (governments will still make money by lowering taxes but that doesn’t mean it is not a subsidy). I can see where you’re coming from, but at the same time it is still a subsidy.

          • P0l0nium says:

            NO it is NOT a subsidy. Ford has a nice fat profit margin on Lincoln Continentals… does that mean the Taurus is “subsidised” even though it makes a profit?

            Problem is … “subsidy” is an emotive word and its used by anti-trust lawyers to promote bogus claims of “illegal subsidy”… which is, of course, bad! Intel people know a LOT about Illegal subsidy having had their DRAM business trashed by Japanese “dumping” in the 80s.

            If you want to write an article about “illegal subsidy” then take a look at the financing of ALL of Intel’s competitor FABs.
            Global Foundries – Funded by the Sheikh of Abu Dhabi’s Oil billions and DOESNT PUBLISH ACCOUNTS.
            Samsung – A Korean Chaebol that can cross-subsidise from ship-building if it wants with no oversight.
            TSMC – funded by printing stock certificates for a bunch of Chinese Gamblers.

            And THEN tell us what the “market price” of Silicon is.

          • No because ford is the supplier and producer of the Taurus. In this case Intel is the supplier of a component and other firms are the producers of the Chromebook of which the CPU is only one aspect. Therefore they are receiving a subsidy from Intel in the manufacturing process, they are not merely resellers. Ford cannot receive a subsidy from Ford, that’s nonsensical. With regards to your examples of other subsidies, great, but examples of other subsidies doesn’t invalidate whether this instance is a subsidy or not. The market price of silicon is the price which people are willing to buy, the market price of Haswell CPUs are those set by Intel because at those market prices people are willing to buy. Intel can sell the CPUs for their current RRP price (which is higher) but they choose not to because they want to gain ground in the market place, therefore it is a subsidy because the market price is higher. Anyway, I’m not interested in discussing this any further, it’s trivial. We can agree to disagree on the meaning of subsidy.

          • P0l0nium says:

            So if I use a Taurus as a “Joe Public” driver … its NOT a subsidy.
            But if I use it in my taxi business … It IS a subsidy.

            Even though I pay the same price…

            What colour is the sky in your world???

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