Toshiba Portege Z830

As netbook prices continue to fall, these small, low power, low price laptops represent an interesting conundrum for the companies that make netbooks and their components. On the one hand, there are far more people walking around with 10 inch laptops that weigh less than 3 pounds than there were a few years ago — and many of those people probably bought a netbook in addition to a more powerful notebook.

On the other hand, there’s not a lot of money in netbooks. It’s hard enough to turn a profit on a mini-laptop when you can sell it for $400. But a few years after netbooks first hit the streets, most mini-laptops now have starting prices closer to $300, and you can pick up many older models for under $200. That’s probably not much more than it costs to build a netbook.

These mini-laptops are cheap largely because they use inexpensive components such as Intel Atom processors, low resolution displays and entry-level software such as Windows 7 Starter Edition. You kind of get what you pay for, and if you want to do some hard-core gaming, edit huge photos or spreadsheets without constantly scrolling, or perform many other tasks you may want a pricier laptop — and Intel is hoping you’ll consider an ultrabook.

The company rolled out a new design this summer for thin and light computers with solid state disks, higher-performance processors and higher resolution displays than you’ll find on most netbooks. They’ll also carry higher price tags. Intel wants ultrabooks to sell for under $1000, but it will be up to partners such as Acer, Asus, Lenovo, and Toshiba to determine the final prices.

Lenovo IdeaPad U300s

In an interview with Pocket Lint, the head of Intel Japan said that netbooks were focused on price and size, but ultrabooks are focused on performance — which he thinks matters more to consumers.

I agree that performance matters… but I’m not sure if it matters enough to convince potential netbook buyers to trade up to an ultrabook. There’s a big difference between spending $300 on a laptop and spending $1000.

A few years ago when I started writing about portable computers there was one question people would ask me all the time: Why should I spend $400 on a notebook with a slow processor, small hard drive, and low resolution display when I can spend the same amount of money and get a full-fledged 15.6 inch laptop with a more powerful processor?

At the time the answer was pretty obvious to me: Because that 15.6 inch laptop probably isn’t going to leave your house very often. It probably weighs 6.5 pounds and gets 2.5 hours of battery life. Netbooks made portable computing affordable. That didn’t matter to everybody, which is why large notebooks continued to sell, but it mattered to enough people to make netbooks the success story of the computing world for 2008 and 2009. My understanding is that they still sell pretty well, even if netbook sales growth isn’t what it once was.

Now it looks like Intel wants to take the second part out of the equation, and I imagine plenty of people will be asking a similar question: why would I spend $999 on an ultrabook when I could spend less than $500 and get a laptop that offers similar performance? This time I don’t think the answer is going to be quite as clear cut.

Because ultrabooks aren’t the only thin and light computers that offer a reasonable computing experience. You can pick up an HP Pavilion dm1 notebook today for $399. It weighs 3.5 pounds, is reasonably slim, and has a dual core AMD processor and support for HD video and 3D graphics. An Asus Eee PC 1215B offers similar features for about the same price.

HP Pavilion dm1

Sure, a notebook based on Intel’s ultrabook platform will be a little thinner, a littler lighter, and faster (although I suspect the AMD chipset will continue to offer better graphics). But is it enough better to justify a price tag that’s twice as high?

The truth is that netbooks might have let the cat out of the bag: Customers realize today that computers don’t have to be expensive to be useful. Ultrabooks certainly look attractive, but while Intel may want them to replace netbooks in the marketplace, I have a hard time seeing them as anything more than niche products for consumers willing to pay for a marginally better product.

I doubt Intel or any of its partners are pushing ultrabooks simply because they think they’re what shoppers want instead of netbooks. Rather, they’re what the chip designer and hardware makers hope people will want because they help drive up the perceived value of computers to the point where they can be sold for higher profit margins.

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16 replies on “Does Intel hope ultrabooks replace netbooks?”

  1. No way that 1000$ computers will replace Netbooks! The netbook price point is here to stay (or drop further). But I think next gen netbooks will emulate the ultrabook form factor: SSD disks, low weight, thinner and so on.

    1. Intel more or less plans to make a serious push into the mobile market, which includes both Smart Phones and Tablets.  So it’s more like they want to expand the ATOM market rather than replace it but while they are expanding and redefining their low end offerings.

      The Ultrabooks will provide a line in the proverbial sand for their higher end offerings and more traditional computing market model.

      Netbooks for example may become interchangeable with tablets.  Like the Asus Transformer many may adopt hybrid designs to maximize mobile usage potential but keeping the flexibility of traditional usage models.

      Though most of these changes won’t become really apparent until after ATOM is updated to 22nm and Intel heads towards 14nm and soon after 10nm manufacturing.

  2. Intel uses the Ultrabook to create its own MacBook Air; it is a marketing concept that tries to persuade people that Intel products can be as cool as Apple’s. It will remain as a niche product if the volume stays low and the price stays high. However, if the volume goes up, the price will fall, then it will eat up the traditional notebook market. 

    1. What!?!?  The MacBook Air was a product developed in collaboration with Intel that has Intel hardware throughout its internals.  I’m pretty sure that if you took the Intel stuff out of the Air then it wouldn’t be very “cool” (as if it was actually cool).

  3. Ultrabooks will fail. Two reasons, price is too high. Infact its triple the price. Secondly, battery life. Those ultrabooks have crap battery life. I hear only 4 to 5 hours. Netbooks have better battery life. And like Brad said, Intel let the secret out, people just need a simple netbook to surf the Internet. 90% of all notebook/netbook owners use their devices just merely to surf the Internet. Nearly everybody got a primary PC or a notebook at home that handles all their CPU intensive tasks, so the portable device they use is merely to surf the Internet.

    Tablets too will ensure ultrabooks die. Why bother with a heavy ultrabook that weighs 1.2KG when you can get a super fast tablet at 599 grams? Like I said, people just want to surf the net and do some basic Word, Excel stuff. Tablets can do that.

    1. Misleading comparisons, a Ultrabook will be a full notebook in ultra portable form factor and you’re comparing them to basic computing devices.

      Being able to run Angry Birds and read you email real fast is nothing compared to being able to run something like Maya, and doing other things that require real hardware performance.

      Even next gen ARM chips coming out next year only bring the CPU performance to around Intel ATOM range.  You can’t even run 64bit software on ARM because they’re all still 32bit processors.  While the next big ATOM update won’t come till 2013 with Silvermont.

      Sure, lots of people don’t need to do much on the go but lets not pretend there aren’t a lot of people who also do work on the go and for them they’ll need more than a basic computing device.

      We’re just at the prototype stage of Ultrabook development.  The design and price point are really meant for Ivy Bridge on, rather than being based on the technology available right now.

      Asus for example plans to start offering Ivy Bridge based Ultrabooks with a starting price of just $600.  While the pricing and power efficiency should get even better once they go to full SoC design with Haswell in 2013.

      So there is a market for Ultrabooks and we’re a long way off from assuming they won’t make it.

      1. They aren’t many people doing heavy duty cpu intensive tasks on the go. That is a fact. Just a handful. Go to any cafe or airport in the word, nobody with a superfast computer does video editting or CAD stuff.

        Now with notebooks like the Asus 1215B, cheap at $300, everybody has a big screen with resonable poer. And it weighs about 1.4Kgs. Ultrabooks weigh at 1.5 kgs. So, no real imrovement in terms of weight.

        If one compares with tablets, yeah there is real improvement in weight in comparison with the traditional laptop. 1.5 kg vs 599grams. So ultrabooks is merely a concept doomed for failure.

        Don’t just assume, learn to observe in the real world and day to day life of everybody. That is even better than market research.

        90% of people merely use their notebooks for light tasks, mainly, surfing etc and they all have their (another) primary powerful PC or notebook at home for all their CPU intensive tasks. 

        Anybody here see someone doing video editting or CAD in a Starbucks cafe?

        1. Sorry but it’s you who are assuming.  I both observe the real world and pay attention to market trends.  Your assumption is simply wrong as their are plenty of people who use full laptops on the go.  The popularity of the MacBook Air is in particularly due to the fact people want that performance in as a portable package as they can afford.

          Besides, someone at a airport or cafe is also far more likely to get their property stolen.  So they’re not going to flash their expensive gear unless they have to.

          Fact is there is already a market for Ultra Portables that have been sold for years and they wouldn’t be still coming out with new models if there wasn’t a market for them. 

          While Ultrabooks stand to make that category even more appealing with a more affordable offering that still provides full notebook performance on the go.

          Again don’t confuse these early prototype Ultrabooks with what they will start having by next year.  The pricing will go down and besides all this really does is give people more choices and last I checked more choices was always a good thing.

          Really, a product category doesn’t have to be insanely popular in order to be a success.  Desktops are hardly ever talked about anymore for example but plenty of people still buy them for example.

          I for one like netbooks but for work I either use my laptop or switch to a desktop.  Even when traveling I take both my laptop and my netbook and I see many other people doing the same.

          Sure some people don’t need computers for much of anything but there are people who need computing power as well.  It’s silly and arrogant to assume a product will fail just because you don’t need it!

          The 1215B is a nice netbook but you can only play entry level games with it and the performance with even the new E-450 is still significantly below what you could have with a Ultrabook.

          While Smart Phones and Tablets are even less capable devices.  They’re just more convenient to use on the go as you usually have to be stationary to use a traditional computer.  Even a netbook require a surface like a table or you lap.

          However, Smart Phones are more popular than tablets and now that they are coming out with larger models they’ll likely to start eating into the tablet market as even a tablet isn’t all that convenient to use while traveling and it’s easier to replace a phone than a tablet if you drop or lose it anyway.

          While a lot of what you do with Smart Phones and Tablets will be mainly what usage is good with them. 

          So staying in contact and socializing is best with the Smart Phone, gaming not so much.  While tablets are better for creativity and entertainment, but not great for writing for long periods of time and gaming is still limited.

          Netbooks got the keyboards for easier typing but performance is still limited and there’s still a lot that either will be too hard to run or won’t run at all.

          Leaving Ultra Portables and traditional laptops for those who actually need to do work.

          Those who still need to be portable can look to Ultrabooks while those looking for desktop alternatives will still have tradtional laptops to look to.

          No one model is perfect for everyone and so there is room for them all in the market.

          1. Which stone are you living under? You cannot compare the success of Apple MBA products with Ultrabooks. They have a following. You seem to ramble nonsense, thinking that you are the only one right.

          2. No stones, just experience and logical reasoning based on available facts!

            Apple has a following but there are people who are not regular Apple consumers who still buy the MBA because it does what they want while still being easy to carry.

            Since it’s Intel hardware, those who don’t want to use OSX can just run Windows on it!

            MBA may not be cheap but it’s still more affordable than traditional Ultra Portables and one of the few to go as small as 11.6″.  Panasonic does make models as small as 10″ but they cost nearly double and don’t have the MBA’s thin profile.

            Besides, companies like Sony, etc have been making Ultra Portables even longer than Apple.  So comparison is completely valid.  Like I said the Apple MBA is just the easiest one to point to, but there are other examples and if you talked to as many people as I have then you’ll know lots of people are already looking for what a Ultrabook would provide.

            Ultrabooks are also not too different from previous CULV notebooks, except unlike them Ultrabooks won’t sacrifice performance for lower cost and longer run times.

            We’re just at the early stages of them establishing the Ultrabook market but there will be lots of improvements once Ivy Bridge becomes available.

            You not wanting to be a early adopter is fine, but don’t confuse what they’re offering now with what they plan to start offering in less than a year from now.

  4. Netbooks grew organically and Ultrabook is a manufactured category by Intel. It’s like asking can there be more than one iPad on the market. How can they beat the Eee PC 12″ series? That’s thin, light and powerful enough for most. It always comes down to price unless you are Apple.

    1. Yes, price is a factor but also performance. 

      Ultrabooks will fill a different need for those who want or need more performance than netbooks can provide but they don’t have to give up as much portability as they would with a regular notebook.

      Ultra Thin laptops have been growing in popularity for some time.  The success of the Apple MacBook Air being the most obvious example.

      They fall under a different usage model than netbooks though.  Since the higher price and higher performance will make them more likely to be used for workhorse application.  While netbooks low price will mean people can more readily afford one and also more likely to risk taking them places that they could be afraid to take their Ultrabooks.

      So I don’t see them so much competing as complimenting each other in most cases and like with notebook owners, many Ultrabook owners are still likely to also have a netbook.  Though that may compete with tablet users once tablet prices start getting into the netbook range.

    2. Agree with you totally. No way one can beat the Asus 121B. I am writing on it now and it is superfast. Yet, it cost US$300 only. Ultrabooks are doomed already. Battery life with wifi on in the 1215B is about 6 hours, much better than the ultrabooks. It looks thin as well albeit not as thin.

      Why even bother buying ultrabooks unless they drop the price to half?

      1. You shouldn’t be trying to justify it to yourself but seeing how other people could find a use for it.

        Engineers for example could use something with more computational power on the go.

        Freelance Graphic designers that need to do more than web designs can use more powerful systems on the go.

        Journalists who need to handle video editing on the go need more powerful systems.

        Students studying subjects that require more powerful computers can’t always settle for netbooks.

        Scientists who need to run simulations, run tests, and other computational tasks on the go could also make use of Ultrabooks.

        People who want to play mid-range games would find Ultrabooks a nice alternative to having to tot around a gaming laptop.  While netbooks are only capable of handling entry level gaming at best.

        There’s plenty of people who would find Ultrabooks a good solution.

        While you shouldn’t worry about netbooks.  They’re getting even cheaper and will start catching up on performance and features by 2013.

        Competition between ARM and AMD with Intel will just start making everything better in the next couple of years and we’re going to be getting better products as a result.

        Besides, Intel setting up the Ultrabook category means they’re finally willing to improve the netbook market and not rely on strict limitations to separate netbooks from the rest of their products.

        So we can finally start seeing more premium features filter down into netbook systems.

  5. You are right, Brad, the price difference is too great.  I took a third choice: Thin and Light 11.6″ Acer 1430Z with a Celeron for $380 (now the 1830T with Core i3 is available for the same price).  The speed is better, but the battery doesn’t last as long.  I much prefer it to the 10″ netbooks.

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