Intel Bullish on Ultrabooks, Smartphones Remain a Question Mark

By Damon Poeter

Intel on Tuesday expressed a lot of confidence in its plan to reshape the notebook PC market with Ultrabooks over the next year while offering more details about its smartphone ambitions and talking up its new server-workstation platform code named Romley.

The chip giant reported “solid” but unspectacular earnings for the first quarter of 2012, but promised that it would have better numbers to offer for the rest of the year, thanks to new product mixes and the end of the hard disk drive shortage caused by last year’s disastrous floods in Thailand.

Intel chief executive Paul Otellini said the company’s prediction that Ultrabooks will make up 40 percent of the laptop market by year’s end remains on target. The company introduced its initiative promoting affordable, thin-and-light laptops with long battery life, fast boot times, and robust security features at the Intel Developers Conference last year and the first wave of Ultrabooks arrived just a few months ago.

Year of the Ultrabook?

But Otellini said Intel has barely tapped into the $300 million fund it set up to promote Ultrabooks and expects the second wave of Ultrabook offerings that use the chip maker’s forthcoming 22-nanometer Ivy Bridge processors to really propel the category forward—even as prices drop from the $800 to $1,000 range for currently available Ultrabooks.

“The Ultrabook fund hasn’t really kicked in yet to where it’s yielding bill of materials reductions [for computer makers],” Otellini said, addressing the challenge to get Ultrabook prices down facing Intel and its OEM partners. “The biggest change is really competition and more designs, which is driving volume and making people more competitive on pricing.”

The Intel CEO also said the release of dual-core Ivy Bridge chips for laptops later this year, combined with the expected availability of Microsoft’s Windows 8 operating system would give Ultrabooks a big boost for the second half of the year.

“The biggest change and the one we’re really focused on is being able to intersect [Ivy Bridge and new Ultrabook designs with] the Windows 8 launch and have Ultrabooks that are really touch-enabled,” he said.

The company also expects to roll out its first vPro-enabled Ultrabooks for business customers in the summer, further building out the category across the multiple market segments Intel serves.

“Intel has 23 Ultrabook designs currently in the pipeline and they expect to add 100 more for 2012 and for many to be at ‘mainstream prices’,” said Patrick Moorhead, principal analyst for Moor Insights & Strategy. “By the holiday selling season some Ultrabooks will have convertible or touch displays, giving consumers some very hard choices between a tablet or a touch Ultrabook. More info