Market Overview

Has Intel Finally Beaten Apple?

The company behind the Core 2 Duo and Pentium processors is gearing up for its most astonishing year yet.

According to DigiTimes (via AppleInsider), Intel (NASDAQ: INTC) expects to ship 20 million to 30 million ultrabooks -- the thin, MacBook Air competitors -- by the end of 2012. In the following year, Intel expects shipments to double or triple.

"Second-generation ultrabooks are set to launch after May 2012, while hybrid ultrabook models, which combine the design of tablet PCs with ultrabooks, are set to appear in the fourth quarter along with Windows 8," DigiTimes reports. "Meanwhile, Intel is also cooperating with optical disc drive makers to develop ultra-thin ODDs for ultrabooks."

DigiTimes' sources are from the "upstream supply chain," which means that the info is about as reliable as any other rumor that the publication reports. (Remember the report suggesting that the iPad 3 would come with a battery that provided double the power of the iPad 2? That was one of many unfounded gems from DigiTimes' "sources.")

That said, this is Intel, and we should not put anything past the company in terms of ultrabook publicity. If shipping 30 million units means that the company could earn a few headlines -- and the potential to actually sell 30 million ultrabooks -- Intel might attempt to do it. Never mind demand; Intel is trying to change the world. And while the Mac maker has been a decent partner in other sectors, Intel trying to do so without the Apple (NASDAQ: AAPL) name.

Whether or not it will be successful remains to be seen. It wasn't that long ago that people -- and by "people" I mean "corporate executives at PC manufacturers like Hewlett-Packard (NYSE: HPQ)" -- believed that netbooks would be the future of portable computing. Experts think that tablets are likely to take over, which is probably true in terms of overall sales. The iPod Touch alone has sold more units than any one particular laptop model from any of the computer manufacturers -- why couldn't the iPad (or some other good tablet, if there ever is one) sell just as well? But even if it does, there will still be millions consumers who buy a laptop every year. Slowly, more and more of those consumers are turning to the MacBook Air, and Intel is dying to cash in on that.

The problem, however, is not that Intel can't compete, it's that it won't. Intel isn't going to pour its money into manufacturing an ultrabook itself. Rather, it will leave the manufacturing duties to other companies, none of which have been able to produce an ultrabook that is capable of rivaling the MacBook Air. While there is still time for an Air-killer to be produced, with each passing month, Apple inches closer and closer to market dominance. The iPhone maker may have found it impossible to sell more white MacBooks and MacBook Pros than the average Windows laptop, but it has had no trouble dominating the area of ultra-thin, ultra-portable computing.

Apple pulled this off not so much with innovation but with massive refinements. After launching a lackluster MacBook Air that was too costly, too slow, and contained old-school technology, Apple went back to the drawing board and produced a laptop unlike any other. It took Intel and its manufacturing partners a good year to release the Air's first true competitor. But without any significant refinements to speak of, Intel has failed to impress.

In fact, the company seems to be moving backwards. Whereas the MacBook Air is a slightly overpriced (but extremely well built) machine, the ultrabooks are poorly built, thus making them appear to be much more expensive than the Air. If you had a choice between at $1,300 Apple machine that worked flawlessly and a $1,000 ultrabook with some issues (ex: lower-quality screen, unreliable touchpad, slower boot times, etc.), which would you choose? Would the $300 savings entice you to buy a lower-quality product?

When faced with this dilemma in the past, consumers had much more wiggle room. They could buy a solid Dell (NASDAQ: DELL) laptop for $700 or $800, or get a base-model MacBook Pro for $1,199. Overall, the Pro was likely to be the more stable machine. But depending on what you planned to use the computer for, it may not have been worth the extra expense.

With the thinner and newer laptops, however, the differences are far greater. This (and the fact that Apple was the first to market) has allowed the Mac maker to soar at retail.

If the second- or third-generation ultrabooks prove to be more formidable competitors, Apple might finally have to worry -- and Intel might finally be able to relax. Then again, one has to imagine that the next-generation Air is just around the corner. And if it is, any progress made by the ultrabooks may have been in vain.

Follow me @LouisBedigian

Posted-In: Apple AppleInsider Digitimes IntelNews Rumors Success Stories Tech Best of Benzinga

 

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