Are Ultrabooks Just Keeping Up With Apple?

Intel has created and “speced” a new form factor for notebooks it is calling ultrabooks. Many have speculated that this is a direct response to the popularity of the MacBook Air. But if this effort is only focused on that narrow vision, it will fail. Ultrabooks represent a much bigger strategic vision (and investment) that could revolutionize the notebook market, if Intel is successful.

The general PC market, and especially the notebook market, has grown somewhat stale over the past few years. Indeed, most innovation in computing has been directed at the myriad of mobile devices. Some pundits are speculating that we have moved beyond the PC era and users are switching to smart phones and tablets as primary computing platforms.

We do not share this view, and believe the PC has real benefit for many use cases and will remain a predominant platform for many business and consumer users. But Intel and its ecosystem (e.g., Microsoft, notebook vendors, app vendors, user interface specialists) must stimulate and regenerate notebook interest based on the latest trends in thin, light, responsive and great user experience that users have grown accustomed to using tablets and smart phones. Intel plans to do so with its new ultrabooks, a term it owns and will only allow to be used by vendors that meet Intel-defined minimum specs, and only by Intel-powered machines (AMD/ARM powered devices won’t be able to use the ultrabook branding).

Can Intel and its ecosystem revitalize the notebook market and stimulate consumer demand (and a new buying cycle)? If ultrabooks are only thin light MacBook Air knockoffs, they won’t be very successful. They need to be more. Certainly thin and light are important. And price is always an issue – the first generation of devices now coming to market are typically premium priced at $700-$900+, and not very attractive to many consumers when compared to $300-$500 mainstream notebooks. But we believe ultrabooks will undergo some significant changes in successive generations of product over the next 1-2 years. First, with next gen Core chips from Intel (IvyBridge due later this year), ultrabooks should be able to achieve 8-10 hours of battery life even in a reduced form factor necessitating a smaller battery. They will also be optimized for instant on (less than 10 seconds from sleep mode) which will solve one of the biggest complaints of PC users and make ultrabooks much more like mobile devices. Ultrabooks will include enhanced security capabilities for protection from malware attacks, safer document/media control and web surfing. And they will include improved media creation and consumption capability to enhance the end user experience. Finally, touch interfaces and touch enhanced form factors will emerge that will allow users to interact with devices in a more natural way.

Of course, much of this functionality is dependent on the next generation of OS powering these systems. Microsoft has not yet fully specified Windows 8 availability and the functions it will allow. But we expect a version of Windows 8 that is optimized for this new form factor to be included in the general release of Windows 8 later this year, combining features of the Metro UI, enhanced boot and recover from standby capability, and specialized functions and drivers for the new ultrabooks. And success will also be dependent on the ultrabook OEMs creating differentiated product “fine tuned” for specific consumer classes (e.g., business users, portable gamers, media creating and consumption, social media centric, artists, etc.).

A number of first generation ultrabooks are being announced at CES. But we expect the “real” ultrabooks will emerge later this year with the new chips, new OS and new user functionality and performance. That is when the true value of the ultrabook devices will be judged. And we expect a number of lower end ultrabooks to come to market at $400-$500 (or less) by the end of 2012, making them more competitive with the mainstream notebook “bricks”. We further expect to see a variety of uniquely derived form factors (some with tablet-like flip over, extended screens, connectivity (media) options, etc.). It is at this point that the ultrabooks will move away from just being seen as a MacBook Air knock-off.

Jack Gold in Business Products on January 06