And the slow death of the Ultrabook begins

And the slow death of the Ultrabook begins

Summary: This feels like netbooks all over again, and it won't be long before a promising platform is driven into the ground in an attempt to cost as many costs as possible.

TOPICS: Tablets

Ultrabooks have yet to take off, but Intel is already looking at ways to shave dollars off the cost of these thin and light devices.

Intel engineers have come up with a design that allows Ultrabook shells to be built using a plastic as opposed to the metal that has been used so far. This is a move that could cut anywhere between $25 and $75 from the price, reports Reuters.

The problem with Ultrabooks is that while Intel aspires for these devices to have a starting price in the region of $699, most will be priced at $1,000 and beyond, pushing them into the premium category and putting them in direct competition with hardware from Apple.

The Ultrabook concept is a solid idea, albeit a design mostly inspired by solid ideas that have come from Apple and its MacBook Air. Apple has proved that consumers like -- and are willing to pay for -- thin and light systems. The problem is that the MacBook Air starts at $999, and even with Apple's 30+ percent profit margin, that means that even the Cupertino giant would be hard pressed to deliver a MacBook Air in the $699 price bracket and still make much of a profit. And we're talking about Apple: a company that has one of the tightest grips on the supply chain in the tech industry.

Windows OEMs building Ultrabooks need to also factor in the cost of a Windows license, further eating into Ultrabook profit margins.

The problem with Ultrabooks isn't the chassis, but the cost of the processor. The Intel processors at the heart of these devices are the most expensive part, costing in the region of $200. Now that AMD has the Trinity line of A-series processors out which cost less than the equivalent Intel offerings, the company is now under pressure to cut costs. Rather than cut into its CPU profit margin, Intel is instead looking at other ways to trim costs so that OEMs can maximize revenues.

A thin and light system built around an aluminum chassis that is strong, light and capable of dissipating heat makes sense. But now we are now seeing signs of compromise, and in the worst possible place, because this is the part that people see and touch. While most people don't have a clue what's supposed to be inside a portable system, they are aware of what they're supposed to look like, and the message that Apple's been giving out is that plastic -- whether it's cheap or not -- is not what a portable system is supposed to be made out of.

Once again, Apple has set a bar that others have to match up to. And it seems that the bar has been set too high.

Compromising on what an Ultrabook is supposed to be -- especially this early in their lifecycle -- does not bode well for the platform. To me, this feels like netbooks all over again, and it won't be long before a promising platform is driven into the ground in an attempt to cost as many costs as possible.

And so begins the slow but inevitable death of the Ultrabook; death at the hands of a thousand cost cuts.

Image credit: Microsoft/Lenovo.


Topic: Tablets

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  • We'll see

    It just needs to remain a high end PC and it will threaten the Air line.
    • How so?

      How so?
    • "... it will threaten the Air line."

      Best joke all day, Peter. The thing of it is that businesses aren't too concerned with thin and light laptops for most of their employees (maybe executives, but that's it) so those traditional 5-7 lb monsters will continue their reign in that category, while consumers generally look at Apple when they're going to spend a large amount of money on a computer and the mainstream laptop for the not-Apple alternative.

      UBs are either going to become a more-powerful netbook in terms of build quality, or they're going to remain the expensive devices they are.
      • huh?

        5-7 pounds is a monster now? Hit the gym people.
  • Business is only ramping up and you've got Ultrabooks on a death march

    Anything for click these days, right Adrian?
    DTS - Your Linux Advocate
    • Now entering the the Post-Ultrabook Era

      Prepare to be presented with articles about how we are now in the Post-Ultrabook Era.
      • We're always in the Post-Something Era...

        Can't wait for the Post-Apple Era...
      • Post-Apple Era came and went

        @ lepoete
        ...and may come again. The 90s should, by all rights, have killed Apple. What they've accomplished in the last 10 years though will stand them in good stead for some time to come.
      • I didn't know Post got into the PC business? I thought they made cereal...

    • Really?

      "The problem with Ultrabooks is that while Intel aspires for these devices to have a starting price in the region of $699, most will be priced at $1,000 and beyond, pushing them into the premium category and putting them in direct competition with hardware from Apple."

      So Adrian's contention is that with similar hardware people would buy an Apple over Windows? i can see that seeing as how Apple has vastly surpassed Windows in the portable computer market. ;)

      <snort><giggle> I could barely type that last part with a straight face.
      • The more important measure is profit

        In terms of profit share, Apple dominates the PC market. This is partly because of the very issue Adrian points to -- the tendency of other PC makers to drive margins down to the point where they can't match Apple in terms of either hardware design or marketing. This allows Apple to keep its margins high, fuelling investment in even better hardware designs, plus more effective marketing etc.

        A key ingredient in the Mac's success was the switch to Intel. Macs can run Windows (I know some Mac users who immediately installed Windows and don't even know how to use OS X), so in contrast to the 68k and PowerPC eras, there is virtually no risk for a non-Apple PC user in trying a Mac. If they like OS X, Apple gains, whilst other PC makers and Microsoft lose. If they don't like OS X, Apple and Microsoft both gain (Windows retail licences cost much more than OEM licences), whilst other PC makers lose.

        If ultrabooks come to be seen as inferior goods compared with the MacBook Air, Apple will have little to worry about in the PC market for the time being. On the other hand, if Intel can chip away at costs without reducing quality (something that at least seems unlikely), Mac sales could eventually suffer. At any rate, the bigger risks for now are in the phone and tablet markets, which are much more important for Apple than the Mac anyway.
      • Apple or Windows

        Can't be more absurd comparison.

        Apple is a company, Windows is a trademark under which Microsoft sells various software kits.

        If you talk about the Macbook Air, that's another thing. The Macbook Air is an personal computer, made by Apple that can run either OS X or Windows (or some other OS you decide to install yourself).

        Windows on the other hand is just the software "OS" kit, that Microsoft offers. It runs fine on the Macbook Air (and any Macintosh, for that matter).

        I hear some people actually prefer to run Windows on Apple laptops, because of the superior hardware and build quality.
    • Compare apples...

      In case of Apple, the supply the hardware and software, where the software comes from themselves at virtually no cost. For the Intel hardware, the MS OS comes from a third party at an additional cost. If all the fan boys can just get over themselves and go back to the days before MS killed the netbooks with XP, and put a well supported Linux distro on it. There, I said it! That will probably slice $200 off the price and make the Ultrabook as successful as the netbook was pre XP.
      Johan Safari
      • Compare apples

        open WebOS seems like an optimal choice for the Ultrabook platform but who know where things are going to go at this point in time.
      • You do realize

        That the reason XP was put on netbooks was because people didn't want Linux. They were being returned, so netbook makers gave the people what they wanted.
  • Ultrabooks were always dead.

    Their is simply too much pressure on both ends of the spectrum for Intel. Amd's trinity is one hell of a mobile processor, and Apple is one hell of a competitor, Intel i boxed into a very small corner, they cannot compete with Apple in the highend and they cannot compete with Amd's trinity for price. This is going to crash and burn.
    • dead

      I think they are dead because of the small screen and lack of optical drive at a much higher cost, but thats just me.
      • What are you talking about with small screen? There will be ultrabooks with

        all kinds of screen sizes.
        Johnny Vegas
    • They are not at all squeezed by apple at the high end. They are in every

      apple MacBook air sold. Until that changes they love it every single time apple sells a laptop.
      Johnny Vegas
      • Not sure

        Except, it is very likely that Apple, by virtue of buying lots of CPUs from Intel, has probably different price and this is what Intel does not like.

        This is typical of manufacturers who offer "discounts" for volume. They tend to dislike their bigger customers, because the per-unit profit they make form them is way smaller, than the "list price" they expect to get from small buyers.

        It is interesting to note, that Apple is not playing this game. They have one price for their products. No discounts for volume, no bargains.