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Intel to drive Ultrabook prices to $650-700, unveil ‘convertibles’

Chip giant Intel, fighting to keep a booming tablet market from damaging its sales, expects its new thin and light platform Ultrabooks to touch the $650-700 price-point by the end of the year, according to analysts familiar with the company’s plans.

According to them, Intel expects Ultrabooks, which are currently priced at around $1,000 and command an estimated 5% of the notebook market, to account for a solid 40% of the consumer notebook market by the year-end. It also plans to launch ‘convertible’ Ultrabooks when it unveils its new line-up of chips in the coming days, analysts said.

Prices have been the topic of heated discussion whenever the prospects of Ultrabooks, which weigh about half as much as a conventional laptop, are debated.

While ordinary notebooks are available for as little as $400 (Rs 20,000), the high price tag on the Ultrabooks have largely constrained their appeal. Intel sees the ‘sexy’ Ultrabooks as absolutely vital to beating back the invasion of the tablets, such as Apple’s iPad.

In discussions with analysts, Intel seemed to feel that the reason behind the high Ultrabook prices has more to do with the PC component prices, rather than those of the chips that it manufacturers.

To put its money where its mouth is, the chip giant is committing nearly $300 million to drive down the cost of components such as displays, the main body, chicklet keyboards, hybrid drives and speakers and fans, according to analysts.

The Ultrabooks are so important for Intel that it seems to have pushed back the launch of its 2012 series of chips by a few weeks, just to get the models (and others) up and ready at launch.

It is due to launch the Ivy Bridge series of chips, which will shrink its transistor size from 32 nanometer to 22, in the coming weeks, possibly in May.

Intel has already got commitments from PC-makers to build 65 Ultrabooks models based on the upcoming Ivy Bridge chips. PC brands such as Samsung and Dell have launched a few tens of Ultrabook models based on the existing Sandy Bridge architecture.

The new Ivy Bridge chips will upgrade the Ultrabooks to their ‘second generation’, with improvements in both power, graphics capabilities and battery life. Yet another upgrade will happen in early 2013, when Intel unveils its Haswell platform that will overhaul the design of its chips. The Haswell will take Ultrabook battery life to up to 30 days of connected standby, according to company estimates.

Many of the 65 models of the second generation Ultrabooks will be part of Intel’s Ivy Bridge launch event, analysts said. There will even be 5 or 6 models that “convertible” — and can be used both like a tablet as well as a notebook.

Meanwhile, Intel’s main competitor AMD will also unveil its much-awaited Fusion Trinity APU series at about the same time. The Trinity chips are also expected to have models meant for very thin and light laptops.

Some manufacturers such as Samsung have already used AMD Fusion chips to launch laptops that weigh around 2 kg only, but the chips have so far been found wanting in power.

The trinity launch is expected to rectify the shortcoming.

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