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Acer: $799 ultrabooks make no profit, aiming for $499 price nonetheless

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Acer tells us that the currently low prices of the entry level S3 ultrabook is unsustainable as it doesn't generate any profit.

acer aspire s3
acer aspire s3

Acer Global President Jianren Weng has been quoted at CeBIT today reiterating something he said at the beginning of December: ultrabooks will drop to the crazy-low price of $499 in 2013 and compete directly against Apple's iPad. This consistent (and aggressive) proclamation prompted us to go and speak with some of Mr. Weng's product managers at the Hannover trade show and gather their perspective on how realistic his ambitions are. As it turned out, attitudes on the ground are a lot less optimistic.

Speaking with Christoph Pohlmann of Acer's laptop team, we learned that the current $799 / €699 price for the Aspire S3 is too low for Acer to actually generate any profit from it. The company is merely breaking even when selling its entry-level ultrabook model and the venture is only made worthwhile by the higher-specced SKUs pulling in a surplus. Christoph told us that the S3 is at present priced on what is essentially a promotional basis — aiming to attract more converts to the hardware platform and the idea of truly ultraportable computing — which is unlikely to last over the long term.

The current costs of sourcing the necessary components and then manufacturing ultrabooks, said Cristoph, are prohibitive for any price point approaching €499, never mind $499. He does leave open the possibility that efficiencies in production and cheaper components could drag the price down, but he was generally dubious on the idea of a sub-$500 ultrabook.

Which is not to say that it won't happen.

Jianren Weng and the rest of the Acer leadership team may well feel that they need a counterpunch to Apple's tablet hegemony and selling ultrathin laptops at a loss may well provide the tonic of user interest that the company has been struggling to synthesize lately. So Acer could indeed live up to Weng's eyebrow-raising promise, just don't go expecting that move to pay off immediately — the company will need to sell a ton of these loss-leader laptops to drum up the sort of interest that can then generate consumer inertia of its own.