Wonder why you can get a Windows 8 tablet with an Intel Atom processor for less than the price of a Windows RT model with an ARM chip? At least part of the reason is that Intel is subsidizing the cost of building Bay Trail tablets until the economies of scale bring the actual price of components down.
That means device makers that want to build a tablet, notebook, or other device can get a bargain on the cost of Intel’s low power chips, as well as help paying for other components that work with those chips.
Intel’s hoping the move will increase its market share and help fend off the growing competition from Qualcomm, Samsung, NVIDIA, and other ARM-based chip makers.
The move means that Intel isn’t actually making much money from the sale of low-cost tablets like the Dell Venue 8 Pro or Acer Iconia W4. In fact, the chip maker is probably losing money. But Intel is hoping that paying now to help bring the costs down will be an investment that pays off in the long run.
By the end of 2014, Intel hopes that about 40 million Windows and Android tablets will be powered by Intel Atom processors.
Hopefully by the time Intel stops subsidizing Bay Trail tablets, the costs of producing them will be lower and retail prices won’t rise. On the other hand, there’s always a chance that once consumers expect devices to offer Bay Trail or better performance, they’ll be willing to pay a premium for devices that offer long battery life, decent performance, and the ability to run full desktop-style Windows apps (something you can’t do at this point on a device with an ARM-based processor… unless Microsoft makes some serious changes to the way Windows RT works).