With Intel starting to push low-price processors and Microsoft offering Windows licensing discounts of up to 70% for sub-US$299 notebooks, sources from the upstream supply chain are concerned that the two giants' aggressive promotions will prompt notebook brand vendors to focus on entry-level notebook models, and purchasing components from second- or third-tier suppliers to cut costs.

　　For US$199-349 10.1- to 15.6-inch notebooks, Intel is promoting its Bay Tail M, Celeron U and Pentium U/Y series processors, which are compatible with operating systems such as Windows 8, Chrome OS and Android. However, the move is likely to impact Intel's profitability in 2014, the sources said.

　　Asustek's 10-inch T100 priced at US$399 already shipped over one million units since launch, the sources noted.

　　As consumers are turning to use notebooks mainly for document processing, low-price notebooks are already capable of satisfying their demand. Google is also trying to grab a share of the segment with Chromebooks and Android notebooks.