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Tuesday, December 13, 2011, 10:28 am
PC makers losing interest in tablets, hope Ultrabooks will improve margins
Traditional PC makers are said to not be paying much attention to the tablet market controlled by Apple and now Amazon, and are instead pinning their hopes on thin-and-light Ultrabooks to improve gross margins.Margins in the notebook supply chain are expected by industry watchers to improve in 2012, according to DigiTimes, as PC makers turn their focus toward the Ultrabook specification spearheaded by Intel. Ultrabooks are modeled after the success of Apple's ultraportable MacBook Air, and PC makers hope the thin notebooks with long battery life will increase their profit with higher prices than low-end notebooks.
Most notebook makers have now turned away from the low-end netbook market, where margins are razor thin. But the report also said that PC makers are also "not paying as much attention" to the tablet market as they were before.
Specifically cited in Tuesday's report were Acer and Asustek, which recently launched quad-core tablet PCs running Google Android 4.0 Ice Cream Sandwich. But those companies have still allegedly lost interest in the tablet market dominated by Apple's iPad, and are said to be "turning their focus back to the notebook market."
Tuesday's report is similar to one from the same publication a month ago, in which it was said that traditional PC makers, like Dell and HP, plan to concede the tablet market to Apple and Amazon in 2012. Amazon recently entered the touchscreen tablet market with its new Kindle Fire, which has already become the online retailer's best-selling product.
Evidence of those changes has already come with Dell's discontinuation of its Streak line of tablets, while HP quickly discontinued its TouchPad tablet soon after it went on sale this summer. And while competitors bow out of the tablet space, Apple's iPad sales continue to grow while the company dominates the market.
As for Ultrabooks, the MacBook Air competitors got off to a slow start in 2011, which has PC makers already eyeing price cuts and cheaper plastic components to gain an edge over Apple. Systems that qualify for Intel's Ultrabook specification are intended to be less than 20mm thick and cost less than $1,000.
PC makers have placed their hopes in Ultrabooks as Apple's MacBook Air continues to grow sales for the company. Last month, one report said the MacBook Air now represents 28 percent of Apple's total notebook shipments, while it is rumored to expand the product line with a new 15-inch model in early 2012.
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Previous Comments View All
So they've given up on tablets, and now they're going back to trying and compete with the MacBook Air instead? 
Some of those ultrabooks sure do look like MacBook Air ripoffs.
And there's one thing that I never understood about some PC laptops. Why in the world do so many of them have their trackpad off center? That looks so ugly and it would drive me crazy if I ever had to use one of those.
Why would these guys give up on tablets... they were doing so well...
Apple has sown up the high end laptop and desktop market where the profits are, Apple has sown up the high end iPad market. Amazon has sown up to low end [and running at a loss] for tablets and probably nailed the non-Amazon Android tablet market to oblivion. Nook may be the exception, since they make money on content not devices like Amazon. iPhone and iPod Touch have sucked all the oxygen out of the smart phone profits. So the non-integrated markets work well for MS and INTEL, but are a disaster for PC manufacturers [low margin] for PC, Laptops, Tablets, and smart phones. A few companies are comfortable with this model, SAMSUNG, HTC, LC, ASUS, etc. but that is on the hope they can move up market into Apple's territory, but Apple is making that real hard with the barriers to entry in manufacturing technology, integrated services [iTunes, iCloud, and soon Siri], and very very tight supply chain management.
So moving to Ultrabooks is:
1. Skating to were the puck is or was not where it will be
2. Are trying to compete by low price and margins, not a good sign for the future
3. Out of the PC, tablet, netbook, etc frying pan into the ultrabook fire.
Keep in mind the MacBook Air is 4 years old and they still can't compete!!! The business models are crumbling.
And there's one thing that I never understood about some PC laptops. Why in the world do so many of them have their trackpad off center? That looks so ugly and it would drive me crazy if I ever had to use one of those.
There is another mystery about PC laptops, which I can observe everyday in my company : my colleagues walking in corridors hold them horizontally, like a pizza box (and not, say, under one arm). Do they fear that holding them vertically would break something into Windows fragile machinery ?
I'm going to label this the most premature article of the decade. Windows 8 is being developed for tablets and computers. I think all the Windows OEMs will be gearing up for tablets for or after the Windows 8 launch.
Bottom line-- they built their business on comodities, and as such they never really invested in R&D. The next front is really "computers" everywhere, in many different forms, and making them effectively work together. Working together is the hard part...
I'm going to label this the most premature article of the decade. Windows 8 is being developed for tablets and computers. I think all the Windows OEMs will be gearing up for tablets for or after the Windows 8 launch.
I'm sure manufacturers will revisit tablets in the future (maybe if and when Win 8 is introduced) but what are they supposed to do in the meantime?
Apple has sown up the high end laptop and desktop market where the profits are, Apple has sown up the high end iPad market. Amazon has sown up to low end [and running at a loss] for tablets and probably nailed the non-Amazon Android tablet market to oblivion. Nook may be the exception, since they make money on content not devices like Amazon. iPhone and iPod Touch have sucked all the oxygen out of the smart phone profits. So the non-integrated markets work well for MS and INTEL, but are a disaster for PC manufacturers [low margin] for PC, Laptops, Tablets, and smart phones. A few companies are comfortable with this model, SAMSUNG, HTC, LC, ASUS, etc. but that is on the hope they can move up market into Apple's territory, but Apple is making that real hard with the barriers to entry in manufacturing technology, integrated services [iTunes, iCloud, and soon Siri], and very very tight supply chain management.
So moving to Ultrabooks is:
1. Skating to were the puck is or was not where it will be
2. Are trying to compete by low price and margins, not a good sign for the future
3. Out of the PC, tablet, netbook, etc frying pan into the ultrabook fire.
Keep in mind the MacBook Air is 4 years old and they still can't compete!!! The business models are crumbling.
I would argue that Apple hasn't sewn up the high-end laptop market, but rather has convinced people that a product like the mba is a better value than a cheap netbook or even a cheap laptop. For that matter, it's already been shown to offer better specs at lower prices than the competition - something that seems to escape those that offer up that Apple only sells overpriced products. As far as the iPad goes - again, it's not a high end market or high end product...it IS the market. The Fire is, for now, the low-end sort of alternative, although given the reviews coming in, they too may suffer the same fate the other manufacturers have with pad competitors.
I agree with the rest of your comments - typical tech market trying to sell people on what is, not what can be. It takes a company like Apple to push us to think different.
Keep in mind the MacBook Air is 4 years old and they still can't compete!!! The business models are crumbling.
To be fair, the Macbook Air became an "ultra book" only with the release of the late 2010 models, and the price drops which accompanied it, still giving Apple at least a year's head start.
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See, the profits aren't found in the production of a specific device; they're found in an excellent execution of said product. PC makers are lookin for a silver bullet, when in reality they should be looking to build a gun that generates silver bullets. Your people and company ideology develop your products, and without both being stellar you have a high chance of failure--and at the minimum are pretty much shut out of being top dog.