Intel Touts Ultrabook Design To Keep Prices Down

Intel officials are reportedly seeking to address cost concerns among system makers about the ultrabook concept of ultra-thin and ultra-light notebooks.

Systems makers reportedly have been concerned about being able to keep the price of the ultrabooks under $1,000 (£611), an important number given that Apple’s new MacBook Air comes in with a starting price of $999 (£610).

According to a DigiTimes report, Intel officials are unveiling a reference architecture for ultrabooks that includes BOMs (bills of materials) that come in as low as $475 (£290) for some models.

Low Cost Option

While the BOM costs don’t include other costs such as assembly or marketing, they’re being touted as proof that ultrabooks can be built and sold for less than $1,000, a key point Intel made when introducing the concept at the Computex show in Taiwan in May.

Intel Executive Vice President Sean Maloney talked about ultrabooks during his keynote at the show. The idea calls for very thin and light devices that offer the performance and capabilities of traditional notebooks as well as features found in tablets, such as instant on, a constant Internet connection and, eventually, touch screens. The systems will come in at less than 0.8 inches thick, with prices lower than $1,000. Maloney predicted that by the end of 2012, 40 percent of all notebooks shipped would be ultrabooks.

Intel has thrown a lot of effort behind the ultrabook idea. The company reportedly is offering OEMs significant financial incentives to build ultrabooks, and in June rolled out three new Core processors designed for ultrabooks. Intel executives reiterated their commitment to ultrabooks during a conference call with reporters and analysts last month to report second-quarter financial numbers. CEO Paul Otellini said the company was planning to spend more than $16 billion (£9.8bn) on various investments this year, with some of that going into the ultrabook initiative.

There has been OEM interest in building ultrabooks, initially from the likes of Asus, Acer, LG Electronics and Lenovo. In addition, reports surfaced last month that Hewlett-Packard also was jumping into the fray with two or more models coming out.

Tablet Competition

However, despite the interest, OEMs overall are taking a conservative approach to ultrabooks. One reason is Intel’s track record with CULV (Consumer Ultra Low Voltage) thin notebooks first introduced by the chip maker in 2009. The idea never caught hold in the market, and now such systems face more competition from tablets, particularly Apple’s iPad.

A second issue is cost, with some OEMs questioning whether the ultrabooks can be built and sold for less than $1,000. Some reportedly are taking a wait-and-see approach, wanting to gauge the market’s reaction to Asus’ proposed UX21 before deciding whether to make a move in that direction.

In a research note in July, Beau Skonieczny, an analyst with Technology Business Research, said the ultrabook idea hold promise, but that a key to its success will be in growing sales quickly to enable better prices to buyers.

“By incorporating newer technologies, such as Thunderbolt [an I/O technology], 3-D transistors and next-generation Ivy Bridge [22-nm] processors, Intel is better positioned to take on higher-end tablet platforms and thin-and-light notebooks, such as Apple’s iPad and MacBook Air products,” Skonieczny wrote. “Intel anticipates Ultrabooks will achieve about a 40 [percent] mix in the consumer market by the end of 2012; however, the success will be dependent on a quick ramp of volume sales to translate to lower prices for consumers.”

Intel’s reference architectures reportedly peg BOM costs for 21mm ultrabooks at $475 to $650, and $493 to $710 for 18mm models. Officials with the chip maker are said to be meeting with ODMs (original design manufacturers) in Taiwan this week to talk about keeping the prices of ultrabooks at less than $1,000. They also will talk about ultrabooks based on Intel’s upcoming 22-nanometer “Ivy Bridge” chips, which are due out next year, and “Haswell” CPUs scheduled for release in 2013.

Intel reportedly has five reference designs for ultrabooks on hand.