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Intel, builders have trouble getting ultrabooks below $1,000

updated 11:15 pm EDT, Wed September 7, 2011

First wave of Intel ultrabooks veer above 1K

Intel is having limited success getting PC builders' early ultrabooks under the $1,000 benchmark set by the MacBook Air if industry contact updates are accurate. The processor designer is trying to bring costs down by focusing not just on fiberglass but on plastic. Even skipping the aluminum-magnesium alloys due to costs and shortages, the early ultraportables from Acer, Lenovo, and Toshiba were all said by Digitimes to be getting real-world prices over the intended target.

At one presentation, Intel reportedly drove home its point on fiberglass and had Mitac on stage. The material supposedly costs half as much as real metal. Acer, ASUS, and Lenovo are all believed to have signed on, although some of their ultrabooks, like ASUS' UX21, have metal shells.

The category is widely presumed to exist out of Intel's concern that notebooks will keep declining in the face of the iPad and other tablets without taking on some of their attributes. Ultrabooks have to measure under 0.8 inches and produce long battery life while still using faster processors. Apple largely invented the concept and is so far the only one to have produced mainstream sales, selling hundreds of thousands each month.

Others trying to compete with Apple are rumored to be very hesitant and making production runs of under 50,000 at first that largely cede the market to the Air.



By Electronista Staff
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Comments

  1. jay3ld

    Senior User

    Joined: Jul 2004

    +31

    Whats that?

    Those who mocked that Apple over prices their products can't build a compatible priced competitor to the Air?

  1. jumpwpb

    Fresh-Faced Recruit

    Joined: Mar 2011

    +12

    Ha ha

    I was just thinking the same thing when I read this! LOL

  1. Bobfozz

    Fresh-Faced Recruit

    Joined: Jul 2008

    +16

    Funny isn't it...

    The PC mantra was "Macs cost more!" Apple didn't mind making money off of premium machines and the PC world can't build junky material-made machines for less! Of course Intel could lower their prices but don't you image Apple has that covered? PC foreigners can't innovate, even when it comes to copying!!!

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +24

    Why does this even matter?

    If consumers really want Wintel ultrabooks then they should just pay $1,000 for them. What's the big deal? The Wintards claim that Windows is such a great OS and Wintel computers are such a great bargain so this is a good way for them to prove it. Let the ultrabooks and MacBook Air have the same prices and see who sells the most product. Aren't the Wintel vendors confident enough that their products are better than Apple products? The Wintards are always saying that Macs are using the same components that the Wintel vendors are using and Apple is just charging more for the Apple logo. So even if Wintards have to pay more, they should still be satisfied with the costlier Wintel ultrabooks. If these Wintel vendors are so worried about margins then why don't they ask Microsoft to subsidize the cost by giving discounts on OEM Windows for every ultrabook they sell. Microsoft has plenty of money to give away, so it shouldn't be too much of a hardship for MS to help the Wintel vendors to compete with Apple. Wintel vendors can't claim that their computers are better than Macs and then start crying about price parity.

  1. SockRolid

    Forum Regular

    Joined: Jan 2010

    +5

    The most expensive components

    in a Wintel computer are the Windows license and the Intel CPU. Apple doesn't need to profit (directly) from OS X, so the OS cost in a MacBook Air is low. And guess what. Apple has their own chip design and I think they'll leverage it.

    Eventually they'll put their own ARM-based custom chips in MacBook Airs. No more expensive off-the-shelf Intel chips to buy. The price war will really heat up if and when Apple drops the price of the 11.6" MacBook Air to, say, $799...

  1. tundaman

    Fresh-Faced Recruit

    Joined: Mar 2010

    +7

    Beat Apple is not easy

    PC builders are learning the hard way how to make well-built products in droves with a competitive price: years of planning-ahead, millions invested in R&D and strategic deals with part suppliers.

    Welcome to Apple economy of scale!!!

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    +3

    Wintel PCs

    Our PRICE is #1 and our QUALITY is #2.

    To fully appreciate this fact, call to mind #1 and #2 after downing a six pack and bagful of Taco Bell Burrito Supremes.

  1. mytdave

    Fresh-Faced Recruit

    Joined: Aug 2000

    +1

    don't understand

    Why would Intel or any PC mfgr actively seek to reduce price and margin? Didn't they learn anything in the past about the race to the bottom?

    Be competitive, yes, but stop trying to undercut everyone on price. How about new features and product differentiation? The cost cutting game will only lead to companies going out of business and lackluster profits for those that survive, just like it did in the original round of cheap commodity POS desktop PCs.

  1. mytdave

    Fresh-Faced Recruit

    Joined: Aug 2000

    0

    and...

    Why should Intel be concerned about this anyway? If Apple outsells all the PC mfgs, Intel is not hurt at all, they end up selling the same # of CPUs - just to Apple instead of others. Their efforts to erode margin baffle me.

  1. qazwart

    Fresh-Faced Recruit

    Joined: Apr 2001

    +3

    The lowdown

    Intel chips aren't in tablets. Tablets use ARM chips, and Intel is worried about protecting its market. Thus, Intel is trying to encourage manufacturers to build sub-$1000 ultrabooks to help keep the market. If someone buys an ultrabook over an tablet, Intel wins.

    The big problem is that Apple has spent the last 5 years completely redoing their manufacturing processes. It started with the original MacBook Air, then with the MacBook Pros, and the latest iMacs. The PC manufacturers on the other hand, use the same "buy parts in bulk and s**** them together" method. This is good for making commodity PCs which no longer produce revenue. However, if you want a premium product (like a Macintosh computer), it simply doesn't work. Look at iPads and Mac laptops: They have customized batteries that allow the system to be extremely thin. Look at the motherboard: Extreme integration.

    However, the biggest issue is how PC companies sell PCs vs. how Apple sells PCs. Go to store.apple.com. Apple's five models of PCs are all there. It's easy to see what they are. Want a desktop system? There's the iMac. What a laptop, there's the MacBook Pro. Want an ultra light ultra-book? There's the MacBook Air. Click on the one you want. Let's take the iMac: You're presented with four choices: Two 21" iMacs and two 27" iMacs. The differences are with the processor used, and the choices are clearly labeled.

    Now go to Dell or HP's website and select a computer. Business, Small Business, or Home? "Business Class Performance" "Power for Tomorrow", "Award Winning", Everyday Computing", "Entertainment and Performance", or "Gaming"? What about "Second Generation Intel Core Power"? Is that an i5, i7, Dual Core, or Dual Core 2? I have no idea.

    If you do finally select one model, you are shown 4 to 6 different configurations of that model.

    I wanted an Intel i5, running Windows 7 64bit Business version, with 4Gb of memory, and a 2Tb hard drive. Believe it or not, I couldn't find it. However, I could easily configure an iMac with these specs in under two minutes.

    PCs are assembled as a kit, and you can't produce an Ultrabook PC assembled as a kit. That's the biggest issue PC vendors are having. To be able to produce a profitable sub-$1000 ultra-book computer, they'll have to tear up their entire production and sales force, and rebuild them from the ground up. Just like Apple did five years ago.

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