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Intel draws criticism over ultrabook pricing strategy

At $1,000, ultrabooks are overpriced for a slumping PC market, attendees say

By Agam Shah
September 15, 2011 02:34 PM ET

IDG News Service - Intel hopes to redefine the PC market with a new category of thin and light laptops called ultrabooks, but at around $1,000, their hefty price tag leaves questions about the products' viability, attendees at the Intel Developer Forum conference said this week.

At IDF this week in San Francisco, Intel shared further details about ultrabooks, which are laptops under 20 millimeters (0.8 inches) thick with tablet features. The laptops are designed to be a happy medium between the laptop and tablet, featuring the ability to create and consume content. Ultrabooks run on Core processors, and the company aims to roll out advanced ultrabook designs with features such as touchscreens, all-day batteries and instant-boot capabilities over the next few years.

Intel has pitched the initial price of ultrabooks at around $1,000, and hopes the laptops will make up 40% of its consumer laptop sales by the end of next year. But analysts attending IDF said that the price may not go down well in a slumping PC market where buyers are looking for deals. Ultrabooks could remain a niche product like MacBook Air if the prices don't come down, analysts said.

The company launched the ultrabook after extensive research on laptop designs and user experiences, said Erik Reid, general manager of the mobile client platform at Intel, in an interview. Ultrabooks are a redesign of traditional laptops with new low-power components and hardware, and the chip maker is rallying PC makers to adopt the new laptop designs, Reid said.

Ultrabooks are not meant to replace netbooks or other low-cost laptops, but Reid hopes ultrabooks will take over a considerable chunk -- up to 40% -- of consumer PC laptop shipments by the end of next year.

"As volume ramps and as we drive more business in the market, then prices will be coming down into mainstream," Reid said. He did not define the estimated range of mainstream prices, saying it depended on the configuration and PC makers.

Ultrabooks will start shipping this month. Lenovo has announced the IdeaPad U300S, which is priced starting at $1,200, Acer has the Aspire S3, which is priced at 799 ($1,134), and Toshiba has the Portege Z830, which the company said is priced under $1,000. The ultrabooks have Core processors based on the Sandy Bridge microarchitecture.

Though the thin and light designs of ultrabooks demonstrated on the IDF floor impressed analysts, the $1,000 price did not. There are also question marks around the timing of ultrabook launches by PC makers, considering that a new chip architecture with advanced features from Intel is due in a few quarters and Microsoft's Windows 8 OS is also coming up.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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