This summer Intel introduced a new category of thin and light laptop computers called ultrabooks. The chip maker wants PC builders to use its latest processors in notebooks that are less than 0.8 inches thick, weigh roughly three pounds or less, and cost less than $1000. There’s just one catch: While Intel thinks it’s possible to build and sell portable computers at that price, PC makers aren’t as sure.

Now Intel is putting its money where its mouth is. The company’s investment division, Intel Capital has created a new $300 million Ultrabook Fund that’s designed to promote innovation in a few new areas including technologies that help build thinner computers, offer better battery life, and improve the user experience.

Intel doesn’t just see ultrabooks as the latest iteration of thin, light, and ultraportable laptops of yesteryear. The company also wants them to incorporate some of the advantages of modern tablet computers (which may have something to do with the fact that today’s tablets are largely dominated by ARM-based chips rather than Intel or AMD processors). That includes all-day battery life, faster boot times, and possibly new forms of input including touch panels or gyroscopic sensors.

The new $300 million fund will invest in companies that are building technologies that will help Intel further its vision of ultrabooks… and I suspect the goal is to bribe PC makers to figure out ways to bring down the costs of 11 to 13 inch laptops with solid state drives, fast (but low power) processors, and long battery life.

That’s because the product category largely depends on Intel and its partners’ ability to actually deliver high quality machines for under $1000. The netbook revolution a few years ago drove down consumers expectations for what a thin and light laptop should cost, and with Apple charging $999 for an entry-level MacBook Air, it could be difficult for HP, Asus, or any other company to compete with an ultrabook at the same price point.

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4 replies on “Intel creates $300 million fund to promote ultrabook technologies”

  1. Aside from Intel trying to create a higher priced laptop market that doesn’t keep applying as much downward pressure on their own margins, what is Intel doing?  Can someone please tell me what other legitimate reason would Intel, a CPU manufacturer, have telling it’s ODMs what kind of devices to put those chips into?  Especially since one of their clients is already doing this with their ‘air’ brand of laptops, so they’re basically encouraging the competitors of their second largest consumer to move into the segment.  This can’t be good for that relationship…

    I really don’t get this, or why they think this will be successful when the existing thin and light category starts at $500 and meets a users needs for a relatively less powerful but highly portability needs admirably.  It’s not like any Ultrabook proposals I’ve seen have anything on the Air, or all that compelling.  My ASUS UL30-Vt isn’t a power house but it does everything I need, and has a 10 hour battery life, descrete graphics, and weighs 4 Ibs.  The ASUS Ultrabook, has an IGP, fixed battery with maybe 8 hours of runtime, and weighs what, a half pound less?  Other than a admitedly faster processor, but weaker graphics that can’t accelerate OpenCL (which several applications I use at work make use), the only thing that’s compelling is the use of an SSD out of the box…  Which I added as a aftermarket upgrade for a lot less than ASUS will likely be asking.

    So it just doesn’t make sense as anything but a marketing gimick to drive the prices up on a segement of laptops that their Atom and CULV processors literally gutted two or three years ago.

    Maybe someone can give me a cogent reason for this that I haven’t thought of.  But to me, this is Intel throwing money away just to anger a notoriously fickle, but high volume, consumer of their products.

    1. Actually, it seems apparent that they’re trying to drive the pricing lower.  Early results notwithstanding…

      Since in addition to the incentive funds they are also going to offer parts for less and are providing design parameters to manufacturers that will allow them to meet the sub $1000 pricing and still keep a healthy profit margin.

      This all makes more sense when you consider how ARM is going to start rivaling the Intel ATOM for CPU performance, they’re already ahead in GPU. Combined with how ARM markets are so fast paced means Intel stands to lose a large portion of its market once Windows 8 comes out.

      I seriously doubt the 50% figure being thrown about by ARM advocates but with still nearly 2 year before the 22nm Silvermont update to the ATOM means they will be cutting it pretty close.

      Add Intel wants to get into the lucrative mobile market but also doesn’t want to hurt their laptop market.  So they need to restructure and improve their offerings.  So Ultrabooks is where they are drawing the proverbial line. While they race to both save the netbook range and see if they can make headway into the mobile market.

      Btw, Ivy Bridge will be solving the DX11 and OpenCL support issue and Intel Turbo Boost also effects the GPU performance.

      1. But, Ultrabooks are starting with Sandy, not Ivy.  When we get to see Ivy I may not be upset about their IGP performance, but in my mind, although the HD3000 was a huge step forward, it’s still not powerful enough, and is tuned much more for media performance instead of graphics performance, a trend which I don’t see changing.

        As to the rest, I sort of see what you’re saying.  I agree with you about ARM’s processing power, and I also doubt that they’ll be able to keep pace as the low hanging fruit on their architecture tree is consume, and they start having to deal with the fundamental trade-offs Intel and AMD are with their higher performing parts.  However I don’t see how that affects the Ultrabook market.  To my mind the Netbook market, and MAYBE the lower end of the standard laptop market may be in danger, but not the mid to high range, which is where Ultrabooks are going to sit.  Ergo commiting money to start a product marketing term for a class of laptops that already exists, with perfectly good options at half the price point Intel is suggesting, is somewhat curious.

        As to cutting the costs, the last I heard, Intel agreed to subsidize the costs of a Core i7, and only the Core i7, for use in Ultrabooks, and at that it was a minor price reduction, taking it from roughly %30 of the retail price of the ultrabook, to %25 percent.  Considering the rest of the rest of the Bill of Materials, I don’t see how manufacturers are going to be able to compete in the current market and still make money.  Which I guess is the point of the $300 million dollar fund…  Which could be seen as a anti-competitive bribe since AMD is making a processor that would work in this market.

        Again, since the proposed market is pretty much defined by the Air, which already uses an Intel processor…  I don’t see what their getting, except for maybe a higher base price for the processors that are currently being sold for the ‘Thin and Light’ category.  In turn they are opening themselves up to potential Litigation (Something that has occurred to me since my original post), as well as angering one of their larger clients, one which historically responds very poorly to OEMs who try to increase their competition.

        I’ve seen your argument in several forum boards, but I don’t really buy it.  I don’t think ARM is at this time, or in the near (2-3 year time span) a credible reason to try to artificially create this market. So that leaves the question of what OTHER resons their are, and honestly I don’t see any except maybe AMD, but they have a legal agreement not to bribe ODMs…  That or we’re missing something else, because again, except for the aluminum frame and an SSD, these computers already largely exist, and they typically go for $500-$700 and don’t use top of the range CPUs.  So all I’m left with is the assumption that this is a push to use higher end, and hence more profitable CPUs in a new ‘class’ of machine that, assumedly doesn’t face direct competition from lower tiered products…  Although I think Intel will find out that this is a complete logical fallacy…  Unless again, there’s something else I’m missing.

        1. The first Ultrabooks are not the final design. These are just early adopters coming out with their own design and is why they aren’t meeting the desired price point.

          Sandy Bridge is just what’s available now but they will be quickly pushing for Ivy Bridge next year.

          Establishing a new product category can take time, overnight success is rare after all, and Intel is still pushing through the changes to fully establish this category.

          For reducing the costs, Intel is providing designs that will keep the build cost low enough to meet the $1000 price range. This was in response to the criticism that many could not meet the price point.  While cutting cost of parts and giving incentives are to attract more to start producing Ultrabooks.  Since many companies tend to wait a few years to see how a new product categories does.

          Along with possibilities like you pointed out about dealing with AMD, etc.

          While yes, netbooks are the main things in danger right now but the same reasons for separating the netbook market from the rest remains.  So think of Ultrabook as the fall back point, while they also do what they can to save the netbook market and still try to make their way into the mobile market at the same time.

          Remember, unlike before Netbooks will also be improved and that will start further blurring the lines between netbooks and traditional notebooks.  So establishing a new category helps them put a literal divider between the two extremes while they experiment and push the limits of what they can offer in the netbook, tablets, and mobile devices ranges.

          Thing is all this will take time, including establishing Ultrabooks as a valid category.  So it’s part of a long term plan for Intel.  So what you see now is not its final form.  While we shouldn’t underestimate ARM.  If both Intel and AMD drop the proverbial ball then ARM could really take over a significant portion of the market.

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