Intel's Ultrabook Reference Design To Be Cheaper Than The Macbook Air

Earlier this year, Intel unveiled its plan to redefine the concept of a PC around an ultra thin-and-light chassis reminiscent of the Macbook Air and with a standard CPU TDP of just 15W. OEM reactions to the CPU giant's attempt to reinvent the personal computer have been mixed. For all the platform's theoretical advantages, price has been a major concern; the Macbook Air's $999 base price is nearly double the average selling price of a PC laptop. Historically, PC buyers have balked at the high price tags attached to then-current thin-and-light notebooks--such products may have niche value, but the idea of launching mainstream products built around the concept has made more than a few companies uneasy.

Intel has been working with its OEM partners to resolve their fears and has unveiled the reference specs for ultranotebook products. The cheaper ultranotebook model will be 21mm thick with a BOM (bill of materials) between $475-650. A second, thinner model (18mm thick) will have a BOM between $493-710. These figures represent the cost of the components within the systems, not the additional expense of assembling, testing, marketing, or distributing the units. Unlike netbooks, Ultrabooks will target the full range of consumer notebooks with screen sizes ranging from 11-17 inches. 

If DigiTimes is right, the new systems will eschew the use of module-based components in favor of directly soldering components to the motherboard. Other reports have indicated that Intel and its partners have had to research alternatives to an aluminum-based chassis. Apple, these sources report, has already spoken for most of the available aluminum unibody manufacturing capcity in the world. While we'll see some aluminum-magnesium products from PC OEMs, other materials like fiberglass are expected to dominate the segment.

Products, like the prototype UX21 Ultrabook Asus has shown, are clearly reminiscent of the Macbook Air

Ultrabooks are a risky investment, particularly for an industry where adding an extra USB port is often seen as a daring move. The leap of faith both Intel and the various OEMs are making may be driven equally by fear and opportunity. On the one hand, Ultrabooks are designed to blunt the damage a further surge in tablet popularity could do to Intel's business. We expect to see the various OEMs offering cheaper Ultrabooks as "tablet+" models, with such systems marketed as offering the same size and weight advantages of a tablet combined with the computing power of a traditional notebook.

At the same time, these new notebooks are a response to flagging demand for netbook-based products. When netbooks debuted, consumers snapped them up in huge numbers. This was partly driven by necessity--the recession left buyers unwilling to spend more than they had to--but also by the longer battery life and easy portability the diminutive systems offered.
Atom sales have fallen off sharply in the past year, thanks to a recovering economy (so much for that), recent strong competition from AMD, and Intel's own decision to hold Atom's performance steady at 2008 levels.* Long term, Intel still plans to introduce more advanced Atom platforms that can compete in handheld and mobile devices. Ultrabooks are meant to anchor the company's mobile strategy by providing the same benefits that made Atom so popular without requiring end-users to sacrifice performance.

Note:  While Intel has made dual-core 1.5GHz Atom processors available in netbooks, but these have done only a little to move the bar upwards--particularly when compared to the improved battery life and overall performance of both Intel's Core-based mobile hardware and AMD's own Ontario/Zacate/Llano