Ultrabook Success Hinges on Price [eWEEK]
(eWEEK Via Acquire Media NewsEdge) Intel, AMD and PC makers are all looking to make Ultrabooks a must-have device to revive the PC market. However, making these laptops affordable is the real challenge.
If one had to pick a theme to sum up the 2012 International Consumer Electronics Show last month, it would be the Ultrabook. That's the name chipmaker giant Intel trademarked for the new class of PC laptops that took CES 2012 by storm in Las Vegas, where dozens of Ultrabooks were on display by PC manufacturers.
Ultrabooks are thin, lightweight laptops based on Microsoft's Windows 7 operating system that can boot up quickly, and they've been compared to Apple's MacBook Air. Ultrabooks must meet certain specifications designed by Intel, such as leveraging solid-state storage instead of traditional hard drives.
The machines are also powered by Intel's Core low-power processors. Today's Ultrabooks are powered by Intel's "Sandy Bridge" chips. Later this year, we'll see Ultrabooks running "Ivy Bridge" chips, and by 2013, Intel will offer Ultrabooks based on the "Haswell" processor. Each chip generation promises lower power consumption, better graphics capabilities and better security features than the previous generation.
Ultrabooks are designed to be cheaper than a MacBook Air, which currently starts at around $1,000. Consumers can purchase Ultrabooks from Toshiba and Lenovo today in the $700 to $800 range.
Competitive pricing is the recipe for Ultrabook success. Microsoft and Intel, authors of the famous Wintel dynasty that made each company boatloads of money, are looking to Ultrabooks as the salvation to keep consumers and businesses from simply replacing their existing laptops with iPads and other tablets, which range from $400 to $700.
"The consumer notebook market is extremely price-sensitive, and even if vendors do significantly undercut the MacBook Air pricing, Ultrabooks will still come at a premium above regular notebooks," said Current Analysis analyst Avi Greengart. He added that while consumers may be willing to pay more for portability and other features, it's tough to say how big the market will be.
Working With OEMs
Anand Lakshmanan, manager of Intel's PC Client Group, told eWEEK that Intel works with the OEM to make sure the manufacturer meets specs for the device's thickness (21 millimeters or less) and weight (around 3 pounds), battery life (five to eight hours) and security (Intel Anti-Theft and Identity Protection technologies). The machines must also power up in seconds instead of minutes and awake from sleep in a few seconds.
Intel's PC OEM partners are falling all over themselves to meet the demand, with some 75 Ultrabook machines expected to reach the market by the end of 2012. CES was a hotbed for them, and the showroom floor seemed littered with dozens of examples from the likes of Acer, HP, Lenovo and Samsung.
One of the first to poke its thin head out at CES 2012 was the Acer Aspire S5, which, at 15-mm (0.59-inch) thin, easily beats Intel's thickness spec. The Windows 7 operating system-based Aspire S5 has a 13.3 LCD screen.
On the other hand, Hewlett-Packard rolled out the Envy 14 Spectre, a premium Ultrabook with a starting price of $1,399. The HP unit possesses a 14-inch screen, measures 20-mm thick and weighs less than 4 pounds.
Lenovo may have introduced the most inspired Ultrabook in its IdeaPad Yoga, a convertible device with a double hinge that gives users the ability to convert the device into either a laptop, tablet or touch-screen computer.
Industry analyst Jack Gold believes Ultrabooks represent a much bigger strategic vision and investment - one that could revolutionize the laptop market if Intel is successful. That starts with the next-generation Ivy Bridge Core processors.
Intel's Lakshmanan said Ivy Bridgepowered machines should be able to provide eight to 10 hours of battery life - far beyond the current five to eight hours afforded by Sandy Bridge machines. These Ultrabooks will quickly boot from sleep mode and will include enhanced security capabilities for protection from malware attacks.
Also paramount to the evolution of the Ultrabook platform is Microsoft Windows 8 "Metro" operating system. Metro will be optimized for the Ultrabook form factor, but it also will lend itself to touch gestures, Lakshmanan said. This transition from brick-like notebooks to Ultrabooks may seem casual now, if only because it's in its infancy.
Perhaps most importantly, prices need to get lower if Ultrabooks are to enjoy mass adoption in the consumer and enterprise sectors. Current Ultrabook prices will hinder purchasing from retailers accustomed to shipping $500 and $600 notebooks or $300 netbooks.
Lakshmanan said that because of the current low volume in Ultrabooks, suppliers charge premium prices for the thinner panels and the lighter, thinner batteries required to build the thin machines. Intel wants OEMs to bring Ultrabooks to market as quickly as possible to jack up product volume and ultimately reduce prices.
"I know the price points are trending a little bit higher than mainstream at this point, but our goal is to get these at mainstream price points by the end of this year," Lakshmanan said.
By the end of the year, analyst Gold expects a number of lower-end Ultrabooks to come to market at $400 to $500, or even less, making these machines competitive with the mainstream notebooks. Moreover, consumers will see funkier formfactor options, such as Lenovo's IdeaPad Yoga, ranging from tabletlike flip-overs to extended screens and connectivity (media) options.
"It is at this point that the Ultrabooks will move away from just being seen as a MacBook Air knockoff" Gold said.
AMD Plans to Push Intel
Advanced Micro Devices plans to push Intel with its own strategy for what it calls "ultrathin" machines, which are expected to come to market from a dozen or so OEMs in the second half of the year. The AMD "Trinity" C- and ?-series chips aim to deliver the same performance while consuming half the power of the company's ?-series chips.
Raymond Dumbeck, senior marketing manager for AMD's notebook strategy, said he and his team looked at the thinness, weight and low-power specifications of Intel's Ultrabooks and couldn't see any reason why price points for Ultrabooks are $700 and up.
"We believe the sweet spot is $699 and below," Dumbeck told eWEEK, adding that he expects AMD ultrathin machines to launch in the second half of the year starting at a price point that is $100 to $200 lower than today's Ultrabooks.
AMD plans to focus more on the graphics processing unit (GPU) of its ultrathin computer chips than Intel, which is more focused on promoting the CPU, Dumbeck said. This summer, AMD plans to support more than 200 GPU-accelerated apps with its ultrathin units, including Adobe Flash Player, Microsoft PowerPoint and several games.
Like Intel, AMD is excited about the prospects of Windows 8. The platform will be the first "GPU-accelerated" operating system, said Dumbeck.
However, Intel's Lakshmanan said Intel is also pushing OEMs to be more "multimodal," including touch and voice input. The vendor expects more PCs with the clamshell design to include sensors that react to touch gestures the way tablets and convertible devices currently do.
This will become especially true in 2013 as machines bearing the Windows 8 "Metro" user interface come to the fore. Intel is also working with Nuance to bake voice-command capabilities into Ultrabooks.
IHS research analyst Matthew Wilkins predicts global Ultrabook shipments will grow to 29 million units in 2012. And that growth won't be a one-year boom, as Wilkins expects shipments to soarto 136 million units by 2015, accounting for 43 percent of global notebook PC shipments.
In his analysis, analyst Gold is more conservative. He predicts Ultrabooks in 2014 and 2015 will capture between 15 and 25 percent of the laptop market.
Lenovo's IdeaPad Yoga Ultrabook sports a double hinge that lets users convert the device into a laptop, tablet or touchscreen computer.
AMD believes its emphasis on graphics quality for its ultrathin computers will provide competitive differentiation from Intel's Ultrabooks.
eWEEK Senior Writer Clint Boulton can be reached at firstname.lastname@example.org.
(c) 2012 Ziff Davis Enterprise Inc.
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