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More on supply chain battles for …

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preceding post: Supply chain battles for much improved levels of price/performance competitiveness [Aug 16, 2011]

Digitimes Insight: Acquisition of Motorola may enhance Android services [Aug 30, 2011]

Due to Google’s recent acquisition of Motorola including the tablet vendor’s mobile hardware business, market players have had growing concerns that Google may be heading toward the same business direction as Apple – to work on its own integration of software and hardware. With some of Google’s hardware partners already re-evaluating their strength of support for Android.

However, Digitimes Research believes that the chance for Google to put its focus on operating Motorola’s mobile hardware business is rather slim. Instead, through the acquisition of the hardware business, Google may be considering providing its partners with free hardware reference designs, which would improve its level of support and services, and could significantly affect the mobile device industry in the future.

If Google plans to put any focus on operating Motorola’s mobile device business, it would mean that Google will need to work on increasing the profitability of the hardware, but the idea would conflict with the original aims for Android – to lower the cost for consumers to access the Internet – since consumers will need to pay more to purchase the devices.

Meanwhile, Google is also unlikely to compete for market share through price competition as large shipments with low profitability can easily create inventory pile-ups during a economic slowdown.

Therefore, operating the business on a small scale, but maintaining its strategic role is the most suitable strategy for Google.

If Google’s operation of Motorola’s mobile device business shrinks down to only keeping teams for basic hardware design; software and hardware integration; and basic sales for future cooperation with telecom carriers, Google will be able provide free hardware reference designs for Android devicesto its brand and retail channel partners for production and sales.

Reference designs would greatly benefit brand vendors which have smaller production scales or are crossing over from other industries, as well as channel retailers and telecom carriers. These players will only need to place orders to Google-certified OEMs to be able to receive their shipments, completely eliminating R&D costs.

For Google, such a strategy would free the company from burdens such as back-end inventory, supply chain management, front-end marketing and after-sales services, while allowing Google to provide its users the same high-standard experience of Android, as well as the ability to control product quality.

For hardware players, which have strong R&D capabilities, if such a strategy comes true, these players will face tougher competition from smaller-scale players, as these players will be able to offer Android-based machines at lower prices, while still maintaining a standard level of quality.

For ODM players, their value of providing software and hardware design and integration services will be weakened as demand from clients will decline.

Samsung reportedly recruits ex-HP VP for PC business; considers buying webOS [Aug 29, 2011]

Samsung Electronics, despite refuting reports it plans to take over Hewlett-Packard’s (HP’s) PC business, reportedly has already recruited HP’s ex-vice president of PSG marketing Raymond Wah to handle Samsung’s PC sales, and the company is also reportedly considering purchasing webOS to compete head on against Apple and Google, according to sources from notebook players.

Both HP and Samsung have declined to comment about the purchase of webOS.

The sources noted that the acquisition of HP’s PC business, which has a rather low gross margin, may turn out to hurt Samsung’s panel and DRAM businesses that have rather high gross margins, therefore HP’s webOS may be the target that Samsung has the most interest in.

In addition, Google’s acquisition of Motorola, which may seriously threaten hardware brand vendors, could also trigger Samsung to purchase webOS as a counter measure, the sources added.

Regarding Recent Rumors about Samsung’s PC Business [Samsung Tomorrow, the Samsung Electronics Official Global Blog, Aug 24, 2011]

The recent rumors that Samsung Electronics will be taking over Hewlett-Packard Co.’s personal computer business are not true.

We hope this clarifies any confusion that may have occurred.

Samsung May Buy WebOS [Aug 30, 2011]

Samsung may purchase HP’s WebOS, in a move that would help the phone maker differentiate itself from other Android phone makers in the wake of Google’s Motorola acquisition.

HP recently announced it will spin off its consumer PC division and discontinue its WebOS operations, essentially exiting the smartphone and tablet business despite its software’s good reviews. Samsung, which earlier debunked rumors of acquiring HP’s PC division, may be investigating WebOS instead, according to website Digitimes.

The Korean company staked a claim for itself in the smartphone market with Android devices, like the growing Galaxy line, and has already developed its proprietary Bada platform, designed for newer smartphone users.

However, Google’s recently announced acquisition of phone maker Motorola is anticipated to change dynamics in the Android phone ecosystem as the company shifts from software into the hardware business. If Google becomes a probable rival, phone makers previously reliant on Android may choose to diversify their software options.

Many companies have already been doing this. HTC is set to launch a group of phones running Microsoft’s Windows Phone Mango release, and Samsung today announced it will roll out a line of Wave smartphones powered by Bada.

Acquiring WebOS would be another option for Samsung, as recent fire sales of HP’s discontinued TouchPad device illuminate the software, which has garnered strong reviews. With TouchPad stock nearly sold out, whoever owns the software may have a strong base of users that buys apps and attracts advertisers.

The OS already increased its market share in mobile advertising on the strength of the recent fire sale, one of many signs of a strange, surprising second life for the tablet and its platform. But HP may choose to retain its rights to WebOS and license the platform, as previously hinted.

However, because Samsung already has Bada, some believe HTC may be a more probable buyer of WebOS. The company uses third-party software on all of its phones, but may choose to increase its options as the Google-Motorola acquisition’s effects play out in the longer term.

WebOS was considered a moribund product when it initially launched with HP’s TouchPad a few weeks ago, but the surprisingly brisk fire sales may have given the OS at least a new lease. A new user base now exists for the software, and HP itself today promised software updates to cater to this new audience.

As the fate of Android after Google’s Motorola acquisition — as well as its increasing legal vulnerabilities in patent lawsuits — begins to loom over Android makers, many companies may eye WebOS in a new, favorable light.

Samsung enhances its own mobile platform with the launch of ‘bada 2.0’ [Samsung Tomorrow, the Samsung Electronics Official Global Blog, Aug 25, 2011]

Samsung Electronics has announced the bada 2.0 SDK (Software Development Kit), an application development tool for Samsung’s own mobile platform. Bada 2.0 is expected to be a catalyst in expanding the global distribution of bada smartphones, which have already received significant global sales.

Unveiled at Mobile World Congress in February 2011, bada 2.0 includes many compelling, new features. Borne of Samsung’s heritage in innovation, bada 2.0 brings together a wide variety of new capabilities including multi-tasking, Wi-Fi Direct, Near Field Communication (NFC) and voice recognition. It enables smartphone users to experience advanced services such as mobile payment, transport pass-card recharge and file sharing without Internet networking.

With the improved support for web applications including Flash and HTML 5, users can experience enhanced web capabilities. It also means that smartphones based on bada 2.0 can run any web application developed with Flash or HTML. Samsung expects that this upgrade will help to greatly expand its developer community into Flash and JavaScript as well as the existing C++ community.

A key feature for developer partners is the introduction of In-app Ads. Using the Ads API (Application Programming Interface) developers for bada 2.0 can easily insert advertisements, creating new revenue opportunities. Samsung has also upgraded and strengthened its application development environment, providing developers with increased support. An Emulator has been added to foster a development process suitable to the target environment. Tools such as Profiler optimize the device’s performance ensuring that resources like memory and processing power are used to their fullest capacity.

Samsung has enhanced the ‘Samsung Apps’ retail store and expanded full availability through to 121 countries worldwide. With this 2.0 version, more differentiated functions will be offered from Samsung Apps, including new purchasing options and recommendations.

“Samsung bada and our Wave devices continue to succeed around the world, taking advantage of the mobile technology and brand awareness of Samsung’s leadership in the market,”

-JK Shin, president and head of Samsung’s Mobile Communications Business

In the third quarter this year, three new Wave smartphones, powered by bada 2.0, will launch the market; the devices will range from premium models with enhanced performance to entry-level devices that focus on affordability. Bada 2.0 SDK can be downloaded from the bada developer site (developer.bada.com).

A Trio of new bada 2.0-powered ‘Wave’ Smartphones to Debut at Berlin [Samsung Tomorrow, the Samsung Electronics Official Global Blog, Aug 30, 2011]

Samsung Electronics has announced the launch of the flagship 4” chic smartphone Wave 3, the social-powerhouse Wave M and the smart-start Wave Y. These all wave smartphones will be on display at Samsung’s Stand at IFA 2011 in Berlin.

All three devices, borne of Samsung’s heritage in innovation, are powered by Samsung’s own new Bada 2.0 platform which brings together a wide variety of new capabilities including multi-tasking, Wi-Fi Direct, voice recognition and Near Field Communication.

ChatON is Samsung’s proprietary mobile communication service that works across all major mobile devices. A global cross-platform communication service links all your friends and contacts instantly. Micro-communities can be set up through group chat, while a web client allows the sharing of content and conversations between mobile and PC.

Samsung Apps, an integrated application store for Samsung smartphones, is also available. With an improved UI and enhanced store features, Samsung Apps offers a wide variety of applications from globally well-known content to locally-customized applications.

“Smartphones are gaining popularity by the day. The new additions to the Wave portfolio are the first to benefit from the power of our bada 2.0 platform; the full extent of our commitment is clear to see in each device. We’ve produced easy-to-use smartphones that will inspire the market,”

– JK Shin, President and Mobile Communications business

Smarts meet style, the Wave 3

The Samsung Wave 3 is a beautiful and chic smartphone that crams a market-leading 4” Super AMOLED display. Building on the Wave series’ style heritage in full metal design, the Wave 3 is the perfect device for the style-conscious consumer. Excellently constructed of anodized aluminum, the slim yet solid unibody design supports your active, on-the-move lifestyle. With smarter multi-tasking, seamless push notification and Wi-Fi Direct, the Wave 3 has the capabilities to keep you connected and entertained at all times.

The first ChatON equipped smartphone, the Wave M

The Samsung Wave M allows users to keep up-to-date with their hectic social lives with ChatON and Social Hub. With a wide 3.65” HVGA screen made from tempered glass and a metallic body, the Wave M lets users stay socially connected from everywhere. ChatON, streamlined messaging feeds, enhanced on-the-go web browsing and Wi-Fi applications deliver a seamless mobile experience. Wi-Fi Direct and NFC (optional) add further functionality.

A smart-start, the Wave Y

The Samsung Wave Y is the perfect device to introduce new users to the world of smartphone experiences. With a stylish metallic hairline body and large 3.2” HVGA screen, new users can take their first steps to mobile social networking with Social Hub and ChatON. Simple personalisation is enabled via the Live Panel, Lock Screen and Folder management, while Music Hub, a portable music manager, gives users a jukebox in their pocket.

Products Specification:

All Functionality, features, specifications and other product n formation provided n this content, including but not limited to the pricing, design, components, performance, benefits, capabilities, services and availability of the product, may vary by region and are subject to change without notice or obligation.

Asustek set to launch 5-6 Ultrabook models in October [Aug 29, 2011]

Asustek Computer is set to host a product launch conference for Ultrabooks in New York in October with prices to range from US$899-US$1,999, according to company chairman Jonney Shih.

Asustek will release 5-6 Ultrabook models in October with screen sizes of 11.6- or 13.3-inch.

Shih also noted that the recent price drop of several key components such as panels and DRAM has enabled the company to lower the overall cost of Ultrabooks, and with HP having abandoned its PC business, while Dell and Toshiba are expected to turn cautious about Ultrabooks, the new market is likely to be mainly propped up by Acer and Asustek.

Although Intel still has not accept downstream partners’ requests to cut Ultrabook CPU prices, the company has offered to provide extra assistance to allow its partners to launch sub-US$1,000 models, according to sources from upstream component players.

Asustek upbeat as shipments rise [Aug 27, 2011]

Asustek Computer Inc (華碩), the world’s No. 5 PC brand, yesterday said it expected revenues to regain their growth momentum in the third quarter, helped by a 16 percent growth in notebook computer shipments.

The company is aiming to ship 3.6 million notebooks this quarter, up about 16 percent from 3.1 million units last quarter, while it aims to double shipments of its tablet PCs to 800,000 units from 400,000 units, according to a company statement.

Shipments of netbook computers, which accounted for 13 percent of Asustek’s overall revenues in the second quarter this year, will grow slightly to 1.1 million units this quarter from 1 million the previous quarter.

Gross margins rose to 14.7 -percentfrom last year’s 11.9 percent, but were down from 15.5 percent in the first quarter of this year.

However, third-quarter gross margins might be “under pressure” because of Acer Inc’s (宏碁) aggressive promotion of its PCs in Europe to clear excess inventory, Asustek said.

The company, which is set to start selling its UX series ultrabook next month, is targeting a price range of US$799 to US$1,999, Asustek CEO Jerry Shen(沈振來) has said.

Acer said on Wednesday its ultrabooks would sell for between US$799 and US$1,199.

Intel has said it expected ultrabooks to initially sell for more than US$1,000, before dropping below that price point in the future.

Asustek will start selling higher-priced ultrabooks before it launches lower-priced models next year, Shen said.

Responding to analysts’ questions, he said Intel’s goal of seeing ultrabooks account for 40 percent of the consumer notebook market next year was “over-optimistic.”

He said since the product is still in the early stages of development and since there are issues to resolve such as heat dissipation and extending the battery life, the 40 percent target would only be achievable in 2013, after Intel launches its Haswell platform.

Shen also said it would focus on the Padfone — a smartphone-tablet combo— as its core smartphone development model.

[Padfone a 4.3-inch smartphone that can be inserted into its accompanying tablet’s rear docking unit, powering up the 10-inch panel to enable an enhanced multimedia experience. The tablet will only work when the smartphone is inserted into the dock.
ASUS Padfone Hands-On Introduction [May 31, 2011]

Here at ASUS we are firm believers behind the practice of design thinking. The Padfone has been specifically created to fulfill a demand for both smartphone and tablet users. It is a first of its kind innovation that allows you to switch seamlessly between pad and phone for a user experience that best-fits your activities, at any time. Internet access from the 3G network connection is shared between the phone and pad, as data storage is streamlined through a single storage pool.

“Compared with HTC (宏達電) or Samsung, which are good at developing smartphones, our idea of incorporating the phone into the tablet will ‘wow’ consumers,” he said.

Alex Sun (孫聰敏), corporate vice president of Asustek’s personal mobile devices business unit, last month said the company was finding a niche in the smartphone industryafter its two-year smartphone partnership with US portable navigation device maker Garmin Ltd fell through in January.

“It is the smartphone, not the tablet, that will be the highlight of the Padfone,” Sun said, adding that the tablet will only work when the smartphone is inserted into the dock.

He said prices for the Padfone would be close to that of Apple Inc’s iPhone. The Padfone will be launched in the first quarter of next year.

ASUS Padfone – Behind The Scene [May 30, 2011]

‧Enlarge your screen size any time you need to ‧Seamless transition of applications between pad and phone ‧Eliminate data transfer hassle with a single storage pool ‧One SIM card for two devices ‧Use the pad as an extended battery to charge your phone ‧Have a video conferencing experience and easily share with family and friends

ASUS Padfone – Enjoy the benefits of both Pad and Phone. Make The Switch [May 30, 2011]

Check the exclusive behind the scene footage of ASUS Padfone and people centric design concepts such as seamless data transfer, expandable screen size, 1 SIM card for two devices and more.

Asustek’s Padfone to use new version of Android OS [Aug 10, 2011]

Asustek Computer Inc. said Wednesday that its upcoming device, the Padfone, will run the next version of Google Inc.’s Android operating system, codenamed “Ice Cream Sandwich” (ICS), but the company appeared to be uncertain about the future of its mobile phone business.

The Padfone, which will go on sale at the end of this year or in the first quarter of 2012, allows users to display pictures or videos on a 10.1-inch tablet from a 4.3-inch smartphone seamlessly and to extend the battery life of the phone when the two are combined.

“We chose the ICS because of its better integration across different platforms,” Alex Sun, corporate vice president and general manager of Asustek’s personal mobile devices BU, told reporters on the sidelines of a media briefing to promote the local development of mobile apps.

The ICS, slated to be launched in the fourth quarter of this year, will improve the interoperability among these devices, allowing app developers to achieve higher synergy, according to market analysts.

Sun said Asustek also plans to launch the second generation of the Padfone in the first half of 2012, which is expected to support long-term evolution (LTE) wireless broadband technology and three-dimensional (3D) graphics.

However, Asustek will not launch any new phones by the end of this year because the company needs to “think about the future direction of its mobile phone business” after a shift in Asustek’s strategy for its smartphone lines, Sun added.

Last October, Asustek, which has been selling smartphones under the Garmin-Asus brand since early 2009, said it will not introduce any more co-branded handset models.

Instead, Asustek launched two new smartphones in China in March this year running on China Mobile’s Time Division Synchronous Code Division Multiple Access (TD-SCDMA) network, with the aim of attracting entry and mid-level smartphone users in the booming Chinese market.

The Taiwan-based PC brand sold about 1 million smartphones worldwide last year, but the company has declined to give a forecast for its total smartphone sales in 2011.

HP may resurrect TouchPad, weighs PC spinoff [Reuters, Aug 30, 2011]

Hewlett-Packard Co may resurrect its TouchPad as it weighs a spinoff of its personal computer arm, the head of its PC division said, suggesting HP might revive a tablet that lasted just six weeks in the face of stiff competition from Apple Inc.

HP stunned marketstwo weeks ago, when it announced it may shed its PC business — the world’s largest after the $25 billion acquisition of Compaq in 2002 — as part of a wrenching series of moves away from the consumer market. Those included killing off the TouchPad tablet computer.

Now, the board of the largest U.S. technology company by revenue is expected to decide before the end of the year whether to hive off its PC arm — which began selling the TouchPad in July — into a separate company, considered the best option for shareholders.

Personal Systems Group head Todd Bradley told Reuters in an interview he intends to lead any standalone company created, and expects it to be a full-fledged computer maker spanning tablets, ultra-thin and all-in-one PCs.

“Tablet computing is a segment of the market that’s relevant, absolutely,” he said, without elaborating. He said a spinoff of the Personal Systems Group will bring the “best value” to HP shareholders for taxation and other reasons.

“My intention would be to lead it through this transaction … and if it’s a standalone public company, to lead that.”

Selling the PC division to a rival such as Taiwan’s Acer Inc, which acquired computer maker Gateway in 2007, or to China’s Lenovo Group Ltd, which bought IBM’s PC division in 2004, is not a desirable alternative, Bradley said.

“I would just say that the numbers don’t support that that strategy works,” he said, citing Acer reporting its first-ever quarterly loss last week.

HP has struggled in the PC market — a high-revenue but low-margin business — as popular devices such as Apple’s iPadlure consumers away.

Bradley is on a trip to China, Taiwan and South Korea to meet with employees, suppliers, government officials and media to convince them that HP’s PC business will remain robust and committed to Asian markets.

“China’s obviously a critically important market for HP as well as PSG,” he said.


Bradley said HP will increase investments in Shanghai, and over the next three years expand its Shanghai manufacturing base, consolidate six employee sites into one campus, and make Shanghai a regional headquarters in China for the PSG.

“Regardless of what happens, we’re the largest PC company in the world. We need everybody energized, and while this isn’t business as usual, we need people to go out and sell products every day,” Bradley said.

Suppliers to HP PCs will remain largely intact, although the company may renegotiate and redefine the relationships.

“Unwinding the integration that’s taken place within HP will be enormous amounts of work and effort, justified by the return we think we’ll be able to provide to our shareholders.”

Nevertheless, he said, “we will be one of, if not the largest, customers of all of our major suppliers, be it Samsung to LG to Microsoft to Intel.”

The Palo Alto, California-based company is now exploring options for its WebOS software, which it acquired through the acquisition of Palm, of which Bradley is a former chief executive.

Bradley has said that a number of companies had expressed interest in possibly using WebOS as an operating system, but he gave no further details on Tuesday, saying that he is not in China to announce or even negotiate anything regarding WebOS.

Acer Ultrabook pushing for September launch, says paper [Aug 31, 2011]

Acer reportedly is aiming to launch its Ultrabook in September to compete against Asustek’s UX21, which is also set to appear in the month, and has been pushing its development schedule; however, because the Ultrabook has not yet entered mass production, the plan may still be changed, according to a Chinese-language Commercial Timesreport.

An Acer executive also pointed out that the company has already revised the internal design of its Ultrabook twice and the company will only launch 13-inch models initially, the paper added.

Tablet PC fever is already cooling down, says Acer chairman [Aug 25, 2011]

Acer chairman JT Wang, commenting on tablet PC’s impact on the notebook industry, pointed out that tablet PC fever is already starting to cool down and consumers are also being attracted by notebooks again with Intel’s Ultrabooks and Microsoft’s Windows 8 the major attractions.

Acer is already set to launch an Ultrabook in September with a price as low as US$799, noted Wang adding that Acer has performed surveys and discovered that consumers have a high interest in Ultrabooks.

Some players in the PC industry agree with Wang’s prediction and pointed out that tablet PCs are mainly marketed for entertainment purposes, different from notebooks, which are also tools for work and learning. Therefore, once the tablet PC market reaches saturation, consumers’ motivation to replace tablet PCs will be a lot lower than for notebooks, causing tablet PC sales to stagnate once volumes reach a certain level.

In addition to Acer and Asustek Computer, which plan to launch Ultrabooks in September, Dell, Toshiba, Lenovo and Hewlett-Packard (HP) are all set to launch models in the fourth quarter of 2011 or the first quarter of 2012. Taiwan-based makers of components such as batteries, hinges and chassis have also started small volume pilot production, and are set to start mass shipments in the fourth quarter.

Acer president Jim Wong pointed out that although Ultrabooks will only account for a small portion of notebook shipments in 2011, the percentage is expected to reach 25-35% in 2012, a number close to Intel’s prediction of 40% by the end of 2012.

As for Windows 8, Wang believes that the operating system will contribute a stronger sales boost to notebooks than tablet PCs and will also benefit brand vendors during the back-to-school season in 2012 as the operating system’s launch date will be close to that period.

Ultrabooks and tablet PCs are short-term fads, says Acer founder [Aug 5, 2011]

Acer founder Stan Shihhas commented that the fads for ultrabooks and tablet PCs are both short-term phenomena and urged companies in the notebook supply chain to come out with more value-added products through innovation.

Shih added that Apple achieved success with iPad through its outside-the-box thinking, which is an attitude that all notebook players should learn.

Commenting on Apple bringing tablet PC and smartphone products into the PC market to compete with PC players and creating a great impact on PC demand, Shih pointed out that PCs are the base of the IT industry and tablet PCs are also developed from the base; therefore, in the future, products will still need to go through the PC platform to create even more add-on value.

As for whether Acer’s upcoming 7-inch tablet PC, which is priced less than NT$10,000 (US$345), will stir up price competition within the tablet PC industry, Shih pointed out that consumers want products with low price and convenience, and these are pressures that each player will need to face. Currently, the competition within the tablet PC market is still on track for positive development.

Acer founder optimistic about the new transition of the company [July 29, 2011]

Acer founder Stan Shih, commenting on market watchers’ concerns that the company’s purchase of iGware is overpriced, at an exhibition on July 28, pointed out that software is priceless and he believes the acquisition will give Acer a strong base to transition.

With tablet PCs having strongly impacted the traditional notebook industry, Shih pointed out that Taiwan players, which in the past only focused on developing hardware, and so have no environment to develop software, are all facing the key moment for transition.

Shih pointed out that the acquisition is a good chance for Acer, since the company is currently in the middle of a great transition and possession of world-class technologies is a must. Through the acquisition, Acer will be able to acquire a foundation and can start strengthening it to help it become world-class. This is the key motivation for the acquisition. As for concerns about overpricing, Shih only noted that everybody has a different point of view.

As for rumors that Acer’s ex-CEO Gianfranco Lanci may join Korea-based PC vendor Samsung, Shih, on July 26, pointed out that changing jobs is an usual event in the IT industry and market watchers should put too much focus on the information.

Ultrabooks may push down mainstream notebook prices [Aug 30, 2011]

As several first-tier notebook vendors are set launch sub-US$1,000 Ultrabook models in the near future, sources from channel retailers believe the appearance of Ultrabooks is likely to push vendors to reduce prices for their mainstream consumer notebooks.

Currently, notebook models that adopt ultra-thin designs are mostly high-end models with ASPs of NT$35,000 (US$1,206), a gap of about 40% compared to the ASP of mainstream notebooks.

Since consumers are likely to compare the specifications and price of notebook vendors’ Ultrabook and mainstream notebook models to make their purchasing choice, while some players such as Acer are set to launch Ultrabooks with a price as low as US$799, or Asustek Computer US$899, a range similar to that of the mainstream notebooks; therefore, the vendors may need to reduce prices of their mainstream notebooks in order to successfully digest inventory, the sources explained.

Digitimes Insight: Ultrabook key lies in penetration of ULV CPUs in mainstream notebook market [Aug 18, 2011]

Facing tablet PCs’ assault and Apple MacBook Air’s strong performance, Intel and notebook supply chain players have been pushing Ultrabook products aggressively, hoping to re-boost shipment growth of the notebook industry, and Intel is hoping its cooperation with the notebook ecosystem will increase the company’s competitiveness against Apple, according to Joanne Chien, senior analyst of Digitimes Research.

For notebook brand vendors, Ultrabooks will become a key product to defend against tablet PCs and Apple’s expansion in the IT market; however, if Intel intends to develop Ultrabooks with a similar business direction as MacBook Air, the company will end up failingbecause of high costs and uncoordinated business models, and the company will also miss the important chance to further develop into ultra-thin notebooks before ARM-based Windows 8 notebooks appear in the market.

Therefore, Ultrabook’s target segment should be the traditional notebook marketand not the niche ultra-thin notebook market, Chien noted.

Chien noted that the ultra-thin notebook market with products such as MacBook Air, limited by product cost and business model, is unlikely to become the major battlefield for the brand vendors’ Ultrabooks, but the 14- to 15-inch mainstream notebook markets are expected to see demand recover because of the adoption of Ultrabook’s design elements such as thin and light physical shapes, longer battery times, and faster boot times.

Chien added that allowing ultra low voltage (ULV) processors to penetrate into the mainstream notebook market would generate Intel more positives, compared to limiting them to the ultra-thin notebook market. The action would also help Intel to create a beneficial lineup to prevent ARM group from cutting into the notebook market; however, such a move will require Intel to compromise on its ULV CPU pricing.



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