With limited software innovation in the PC space and a strong demand for increased portability, average selling prices for “basic computers” (email, web, IM, office tasks…) are expected to drop dramatically. Computers using Intel’s ultra-cheap Atom processor will cost only $250 to build. And that’s only the beginning: that trend will continue until there is a significant improvement in operating systems and applications.

Most PC makers expect these computers to

sell in developing countries, but I’m predicting that they will plus have a huge success in the U.S and Europe. That’s not good for gross margins, but the market pressure is just too strong. That said, Intel is well positioned to capitalize on that, thanks to their more advanced manufacturing capabilities.

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Original post by Allanda