Silly Intel, the high price and limited availability were the parts your Ultrabook was supposed to drop

Subject: General Tech | September 6, 2011 - 11:17 AM |
Tagged: ultrabook, Intel

The Ultrabook gambit is receiving a lot of attention and has been since before there was even a single model available for review.  In this particular case the interest is not because of the hardware but because of the gamble Intel is taking trying to muscle in on Apple's ultramobile territory, especially since the memory of the UMPC is still fresh in the minds of many.  Two benchmarks for success have pretty much been agreed upon by the tech wonks; it must cost less than the equivalent MacBook Air and people have to be able to buy one easily. 

As we have seen, the price point is not great as the top tier manufacturers warned us it would be.  By just barely matching Apple's prices on a new technology it gives Apple the chance to show off the maturity of their ultra-thin notebook lineup.  If Intel had managed to better the pricing then there was a chance of some price conscious consumers at least giving the Ultrabook a try.  Since all things are essentially equal between the two products, Apple users are probably just going to stick with what they know.

That price point also raised some reg flags, if manufactures are just barely able to match the competitors market prices it seems likely that their profit margin is taking a hit and the Ultrabooks are being sold on a thin margin just to ensure some will sell.  If that were the case then you would expect to see limited initial runs of Ultrabooks from the major players in the industry and as of today we know that to be the reality.  According to DigiTimes every single Intel Ultrabook partner is limiting their initial runs to under 50,000 units worldwide. That speaks volumes towards the confidence, or lack thereof, that these companies have in the financial success of the Ultrabook. 

That leads directly to the second hurdle Intel faces; availability.  No matter how fantastically paradigm breaking your product might be, if no one can buy one to find out for themselves then it won't survive in the marketplace.  With under 50K available fom the four major top-tier vendors, it will be very hard to find an Ultrabook for sale or being demonstrated.  That will kill the interest of consumers very quickly and could even trigger enough resentment to ensure that the Macbook Air remains the ultraportable of choice even if Intel's product might better the Apple product in certain ways.

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"First-tier notebook brand vendors Acer, Lenovo, Toshiba and Asustek Computer, understanding that demand for notebooks is unlikely to recover in the fourth quarter, while Apple's products are taking up all the glory in the market, will limit their initial Ultrabook shipment volume to below 50,000 units for testing the water, according to sources from notebook makers.

To encourage its notebook brand partners, Intel will host a conference for Ultrabooks on September 14 in the hopes to resolve some technology bottlenecks and attract more notebook players to join the Ultrabook industry.

Acer, Toshiba, Lenovo and Asustek's new Ultrabook models will all start shipping in September and products will appear in the global retail channels in October. Acer's Ultrabook is manufactured by both Compal Electronics and Quanta Computer, while Toshiba's machine is outsourced to Compal with Lenovo's device handled by Wistron and Asustek's model by Pegatron Technology."

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Source: DigiTimes
September 7, 2011 | 07:26 AM - Posted by Umbrel (not verified)

The part I still don't get is how the CPU price is hurting the margins. Does Apple get Intel's CPUe at lower price than the rest of manufacturers?

September 8, 2011 | 02:25 PM - Posted by Virtuous (not verified)

Apple will clean up this holiday season. Apple must be getting cheaper component prices like they receive for iPhone and iPad parts. The rest of the industry has become incompetent.

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