Aug 11, 2011

Why is Intel creating a $300 million fund for Ultrabook design?

I understand that thinner, lighter, faster are three mantras for mobile devices, but I don't get why Intel has created a fund for what they're calling 'Ultrabook' design. Basically they're ripping off the design of Apple's MacBook Air which is thin, light, fast, has great battery life, and is underspecced for RAM and likely overpriced, seeing as it's only got an 11" screen, which means it's just a fancy netbook. Can't Acer, Dell, HP, and Toshiba design their own fancy netbooks? Why does Intel have to fund them, given that Apple's sales of the MacBook Air have been phenomenal?


Reports say that PC vendors are nervous about having to compete against Apple at such low margins. Because Apple has focused so many of their sales on their Air series, they can buy a larger number of parts for a smaller price; for other pc vendors, the cost per part will be larger because Ultrabooks will be just a small portion of the machines they sell. Part of the funding from Intel is to reduce their risk bringing new products to market. Stories say they want a $100 spiff for each Ultrabook sold.


Did I read that correctly? Apple is price-competitive with PC manufacturers? I thought that their products were just overpriced, slickly-marketed disposable electronics that are difficult to upgrade.


That's so funny to me. Apple products are such crap. I mean what PC vendor would make a netbook, charge $1000 for it (that's the cost of 3 Windows netbooks), then saddle the device with a 2gb RAM limitation, soldered in place so customers cannot upgrade the RAM. I can see why earlier netbook designs capped the RAM at 2GB (32-bit limits) up until a few years ago -- they were protecting their higher-margin desktop and laptops from hemorrhaging sales. But since RAM is cheap and plentiful, and 64-bit Windows is fairly common, there's no reason not to soup up netbooks to be as competitive as possible.



While PC manufacturers _could_ develop a high-end, slick netbook that competes with the MacBook Air, they do not have the same high profit margin that Apple has - some estimates put it at 30%-40% - which means that this funding could help PC manufacturers to defray the cost of designing something that is attractive and cutting-edge. Apple is very focused on style; their competitors are more focused on price.


Also, Intel must be feeling pretty scared about the ARM version of Windows which is due out next year. The mobile industry is saturated with ARM devices, and ARM processors cost much less than processors from Intel. I'm certain that Intel is fearing ARM-based devices will take up the product space they've set aside for their UltraBook, which has pressured them to act now before it's too late for Intel to gain a foothold in the mobile market, where they've been stunningly absent.


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