Ultrabooks Face Limited Production From PC Makers


Acer and Lenovo are reportedly rolling out a limited production run for the ultrabook machines

System makers like Asus, Acer and Lenovo are reportedly are limiting the production run of ultrabooks because of a lack in confidence that laptop sales will recover in the fourth quarter, coupled with concern at Apple’s MacBook Air domination.

According to Taiwanese news site DigiTimes – citing “sources from notebook makers” – Acer, Asus, Lenovo and Toshiba will essentially spend the Autumn gauging interest in the ultrabook market segment by shipping fewer than 50,000 units.

The first ultrabooks – most likely Asus’ UX21 – will start shipping this month, with more systems rolling out between now and November.

Limited Production

The news about the limited number of units is the latest example of OEMs’ relatively slow embrace of the form factor that was first introduced by giant chip maker Intel in May. It also comes at a time when Intel officials are making moves to encourage system makers to adopt and build ultrabooks.

System makers are taking a conservative approach to ultrabooks for several reasons, including their experience several years ago with Intel’s Consumer Ultra Low Voltage (CULV) thin notebooks, which never took hold in the market, and continued difficulties bringing the price of ultrabooks under $1,000 (£623), a key point noted by Intel executives when they introduced the idea.

In addition, some OEMs may be waiting until the 2012 release of Intel’s “Ivy Bridge” chips – which essentially will be smaller versions of the current “Sandy Bridge” processors – to really embrace the form factor.

Pricing Struggles

Intel executives envision ultrabooks as combining the performance and reliability of traditional notebooks with features found in tablets, including instant-on and, eventually, touch capabilities. They said the ultra-thin, ultra-light laptops should be no more than 0.8 inches thick, run on x86-based chips and cost less than $1,000.

They see the systems competing with Apple’s MacBook Air, which was refreshed this summer and, at its lowest point, costs $999.

Intel officials said they expect ultrabooks to account for 40 percent of all notebooks sold by the end of 2012, but DigiTimes’ sources said that goal may be difficult to meet.

The chip maker has made several moves to boost incentives to OEMs, including establishing a $300 million (£187m) fund via its Intel Capital investment arm for companies that build hardware and software technologies for ultrabooks. In addition, Intel has unveiled new chips aimed at the ultrabook market, said it will increase investments in the initiative and in August unveiled reference designs that vendors can use to create ultrabooks that cost less than $1,000.

Mobility Move

Analysts have said that ultrabooks are a way for Intel to push its way further into the mobility space currently dominated by chips designed by ARM Holdings and made by the likes of Nvidia, Samsung, Texas Instruments and Qualcomm.

“There is an enormous amount at stake in winning an important piece of mindshare for x86 architecture in the high-mobility space,” Roger Kay, principal analyst for Endpoint Technologies Associates, wrote in an 12 August blog in Forbes.

“So far, smartphones and tablets are virtually all based on ARM architecture. Intel has said it expects design wins this year for Atom-based high-mobility devices that will come to market in 2012, but for the moment, none are in market,” said Kay. “Apple, which has already effectively colonised the very thin notebook space with the [MacBook] Air, bases most of its high-mobility products on ARM, has an in-house processor design team working on ARM development, and could easily cut more of its lineup over to ARM at any moment.”

Intel is looking at a multistep strategy around ultrabooks, with the second step being systems running on Ivy Bridge in 2012. That will be followed by the release of systems powered by “Haswell” processors in 2013.

In this first wave, Acer, Asus, LG Electronics, Lenovo and Toshiba have all said they will roll out ultrabooks based on Intel technology.

Market research firms IDC and Gartner say they expect traditional PC sales to continue to slow through the rest of 2011, with consumer purchases being the key culprit. The commercial PC market continues to be strong, according to analysts.

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