Is Intel Selling Bay Trail Chips Below Cost?

edxwelch writes "An analyst at Bernstein Research has found that Intel is selling their tablet Bay Trail chips to OEMs below cost, concluding that after end rebates, Intel's tablet revenues are likely to be "close to zero," while profits will be negative. Intel has responded that the 'special costs' Intel is incurring are not pushing down gross margin. Intel needs to offer the subsidies to OEMs building $199-$299 devices to bring the bill of materials down and make them competive with cheaper chips from the likes of MediaTek and Rockchip."