PC makers struggling to match MacBook Air pricing ahead of Ultrabook launches

Posted:
in Current Mac Hardware edited January 2014
Windows-based PC makers looking to challenge Apple's extremely successful line of ultra-lightweight MacBook Airs with designs based on Intel's "Ultrabook" platform are losing hope that they'll be able to do so and still turn a profit on sales of the notebooks any time this year.



Unveiled a couple of months ago at the Computex trade show, Intel's new 'Ultrabook' design is a set of guidelines for PC notebook makers aimed at marrying the performance and capabilities of a traditional notebook with "tablet-like features" in a "thin, light and elegant design."



A direct response to Apple's hot-selling MacBook Airs, Intel says it plans to reach a 40 percent share of the consumer notebook market with the "no-compromise" Ultrabook designs by the end of 2012. Its guidelines call for the systems to retail for less than $1000 and sport form-factors that are no more than 20mm thick.



The first Ultrabook notebooks were slated to arrive at that price point in time for the 2011 holiday shopping season but a new report reveals that "actual production costs" to build the new notebooks are roughly as high as Apple's MacBook Air retail prices, which could "render the hope [of matching the Air's pricing] practically infeasible."



Asustek Computer and Hewlett-Packard will reportedly lead the charge with initial Ultrabook production but the former's 11.6-inch UX21 Ultrabook will reportedly retail for $1000 while the 13.3-inch UX31 will fetch $1600 -- $300 more than Apple's new $1,299 13.3-inch MacBook Air. What's more, Asustek hasn't provided any additional specifications for the notebooks, which could similarly struggle to match those of Apple's Airs'.



As such, Asustek is now said to be taking a more conservative approach towards its Ultrabook initiative in 2011, and instead plans only a small volume launch "to test market response" before solidifying plans to make large-volume launch in 2012 when demand is proven and "production costs decrease."







The matter underscores how Apple is slowly but successfully taking its proficiency in supply chain management, long-term component pre-payments, and cost effective designs originally conceived for its iOS device strategy, and transitioning them to its Mac platform, which has long struggled to compete with pricing from rival PC makers.



Designed more like an iPad than a traditional Mac, the new MacBook Airs are already seeing volume shipments in the millions, affording Apple a head start in the market for ultra portables similar to the one its seen in the tablet market, where its agreements with component manufacturers far undercut pricing being extended to competitors who can't compete on volume.



As a direct result, Apple's command of the supply chain threatens to suffocate rivals' access to similar components, thereby limiting the market opportunity for those competitors who then can't catch up on volume shipments of their products needed to secure similar component deals and rock-bottom pricing.
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Comments

  • Reply 1 of 57
    cloudgazercloudgazer Posts: 2,161member
    So the Apple tax on the consumer is finally revealed to actually be an Apple subsidy to the consumer.
  • Reply 2 of 57
    hittrj01hittrj01 Posts: 753member
    Quote:
    Originally Posted by cloudgazer View Post


    So the Apple tax on the consumer is finally revealed to actually be an Apple subsidy to the consumer.



    Yeah, I've always laughed when people try to accuse Apple of overpricing their computers. When you really look at the competitors' attempts to compete head to head with Apple hardware (HP Envy, Dell Adamo, Samsung Series 9, ultrabooks), the prices are either the same with inferior hardware and build quality, or equal in those but with a much higher price tag. The fact that the competitors can't even turn a profit with those prices is even more evidence of how poorly run these companies are in comparison.
  • Reply 3 of 57
    dualiedualie Posts: 334member
    It's not going to stop certain Apple haters from spreading their misinformed (and usually borrowed) opinion that Apple products are across the board more expensive and therefore not worthy.
  • Reply 4 of 57
    matrix07matrix07 Posts: 1,993member
    Somebody followed Apple footstep yet again. Please anybody, try to be a leader for once.
  • Reply 5 of 57
    512ke512ke Posts: 782member
    Gone are the days when the top PC was a big set top box that you could assemble yourself from components you bought at Fry's for a third of what Apple was charging for its cheapest Mac.



    Now Apple can buy the RAM, screens, and other key components for less that we pay at Fry's, and less than what its competitors can pay anywhere in the world.



    What a difference a decade makes.



    EDIT: Also gone are the days when you could upgrade. Hello to the era of lovely products that you use for three years and then get rid of!
  • Reply 6 of 57
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by 512ke View Post


    Gone are the days when the top PC was a big set top box that you could assemble yourself from components you bought at Fry's for a third of what Apple was charging for its cheapest Mac.



    Now Apple can buy the RAM, screens, and other key components for less that we pay at Fry's, and less than what its competitors can pay anywhere in the world.



    What a difference a decade makes.



    EDIT: Also gone are the days when you could upgrade. Hello to the era of lovely products that you use for three years and then get rid of!



    Or even 3 years?
  • Reply 7 of 57
    jupiteronejupiterone Posts: 1,564member
    Quote:
    Originally Posted by AppleInsider View Post


    A direct response to Apple's hot-selling MacBook Airs, Intel says it plans to reach a 40 percent share of the consumer notebook market with the "no-compromise" Ultrabook designs by the end of 2012. Its guidelines call for the systems to retail for less than $1000 and sport form-factors that are no more than 20mm thick.



    I think this is part of their problem. They don't realize that there must be some compromise with these types of notebooks. Apple realized that early on. And after all the complaining about the Air's no ethernet port, no ODD, smaller storage, people are buying them up like crazy. But others are still going to try to cram every possible port/interface/big ass HDD they can.
  • Reply 8 of 57
    mstonemstone Posts: 11,510member
    Also keep in mind that those competitor's machines come with Windows which could be viewed as inferior software along with their inferior hardware. Plus the current public perception that Mac does not get virus and OS X upgrades give the Apple machines a longer life before obsolescence.



    Hard sell for the competitors amongst consumers who actually do research before purchasing.



    Windows popularity appears to be on the decline. Unless you need it for compatibility with your office there is no logical reason to choose Windows in my opinion. Also it seems that students are overwhelmingly choosing Mac, at least judging by the number of Apple logos I see around Southern California.
  • Reply 9 of 57
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by mstone View Post


    Also keep in mind that those competitor's machines come with Windows which could be viewed as inferior software along with their inferior hardware. Plus the current public perception that Mac does not get virus and OS X upgrades give the Apple machines a longer life before obsolescence.



    Asus' $200 MBA-esque netbook* comes with MeeGo, a Linux-based OS.





    * Uses Atom CPU
  • Reply 10 of 57
    sowardsoward Posts: 33member
    Certainly lack of volume, too diverse a product line, lack of planning and innovation (and thus market component scrambling) drive down the potential revenue on systems for these other makers, but, especially given < $1K pricing and low single digit % profits, how much does the M$ tax hurt them?
  • Reply 11 of 57
    john.bjohn.b Posts: 2,742member
    Quote:
    Originally Posted by cloudgazer View Post


    So the Apple tax on the consumer is finally revealed to actually be an Apple subsidy to the consumer.



    I guess we'll have to add "PC Tax" into the vernacular!
  • Reply 12 of 57
    Quote:
    Originally Posted by AppleInsider View Post


    The matter underscores how Apple is slowly but successfully taking its proficiency in supply chain management, long-term component pre-payments, and cost effective designs originally conceived for its iOS device strategy, and transitioning them to its Mac platform, which has long struggled to compete with pricing from rival PC makers.



    Maybe, or not, originally conceived for its iOS device strategy, but also:



    Apple is selling more Macs so they benefit from economies of scale.

    Apple's computers are often made in the same factories as their competitors.



    It's been a long time since Apple was more expensive than comparable PCs.



    The competition has another big problem with their machines, running Windows they need bigger batteries to maintain similar battery life.
  • Reply 13 of 57
    mhiklmhikl Posts: 471member
    Miranda:

    O wonder!

    How many goodly creatures are there here!

    How beauteous mankind is! O brave new world

    That has such people in't!



    Prospero:

    'Tis new to thee.



    and so it could be written . . . Steve Jobs has patience, is influenced by the science of Buddhism to think outside the conventional trap, and has sharp memories of injustice and what such does to creativity.



    Apple, indeed does own the Slim markets with both the MBA and the iPad, but it may soon own a whole lot more than consumer sales in these two lines. . .

    1. The next generation of MBPs coming out seem to be inline for a shakeup so may be following the trail blazed by the MBA.

    2. Now that the Mac mini finally has its power unleashed, such a refresh, one fails to imagine, may be in store for the iMac which seems a little long in the tooth?

    3. Prices of all computer lines have shown steady steps down, could it be Apple has learned a good lesson from its pricing of the MBA and the iPad, comforted by the size of its purse.

    4. If a brighter iPad 2+ is at hand, could the 16GB iPad 2 become the entry pad with a headache making price for the facimilators?

    5. And could the iPad 2+ continue the original price structure with a remake that shoots it past the stratosphere?

    6. And would Apple have put off its new iPhone unless it had some crazy stir-the-soup-recipe, a real game changer that may give the copycats faltering chance of imitating?



    If Apple wants to take the copiers down, price that includes profit is the forgers’ main weakness undermined further by shoddy quality, source problems, lack of an ecosystem, lack of differentiation all standing in the face of almost 80B comfort baubles, a war chest that Apple may have plans to use in sudden death show down.



    Maybe it's time Apple took the gloves off and pulled the gallows’ lever to put the beasts to pasture. M$ did it, though short on scruples. Apple has the coin to do it legally, fairly and honestly, at least in the realm of trade and commerce.



    This could be a Shakespearean play, a comedy with a happy ending, full of blood, guts, gore but very little battle.



    For we who live in the world of Apple, this song is not so new but it is still so sweet.
  • Reply 14 of 57
    tjwaltjwal Posts: 404member
    Quote:
    Originally Posted by 512ke View Post


    Gone are the days when the top PC was a big set top box that you could assemble yourself from components you bought at Fry's for a third of what Apple was charging for its cheapest Mac.



    Now Apple can buy the RAM, screens, and other key components for less that we pay at Fry's, and less than what its competitors can pay anywhere in the world.



    What a difference a decade makes.



    EDIT: Also gone are the days when you could upgrade. Hello to the era of lovely products that you use for three years and then get rid of!



    Its been quite a few years since it was even worth while to assemble you own mid level Windows PC.



    If you want top end though it is still cheaper to do it yourself. This even includes a hackintosh Pro.
  • Reply 15 of 57
    john.bjohn.b Posts: 2,742member
    Quote:
    Originally Posted by 512ke View Post


    Gone are the days when the top PC was a big set top box that you could assemble yourself from components you bought at Fry's for a third of what Apple was charging for its cheapest Mac.



    Now Apple can buy the RAM, screens, and other key components for less that we pay at Fry's, and less than what its competitors can pay anywhere in the world.



    What a difference a decade makes.



    EDIT: Also gone are the days when you could upgrade. Hello to the era of lovely products that you use for three years and then get rid of!



    Successful, even ruthless, supply chain management is no where near sexy sounding as Precision Aluminum Unibody Enclosures or Retina Displays, but it's a huge part of Apple's success. Tim Cook should get more credit for what he brings to the table.
  • Reply 16 of 57
    paxmanpaxman Posts: 4,729member
    Quote:
    Originally Posted by 512ke View Post


    Also gone are the days when you could upgrade. Hello to the era of lovely products that you use for three years and then get rid of!



    If I remember right it was shown that by far most people never upgraded anyway. I read a report to this effect MANY years ago and remember thinking - yeah, I don't know anybody that's ever upgraded anything on their highly upgradable PC's.

    A lot of businesses have a three year upgrade cycle but most computers last longer than that and have a second life after they get ditched by their first users. I don't think many people throw their macs away after three years.
  • Reply 17 of 57
    sheffsheff Posts: 1,407member
    Apple benefits because they have a single unit essentially. While windows "ultrabooks" could in volume be much larger than apple, apple has a single model (well 2 actually) which allows them to buy components in volume comparable or even higher than individual windows pc maker and get lower pricing. Plus they can optimize the crap out of the OS, because they know exactly what hardware the OS will run on. Therefore they don't need as fast of a chip or as large a battery to achieve the same result as a windows machine.



    Plus you always have the apple store if you run into any problems .
  • Reply 18 of 57
    Quote:
    Originally Posted by mstone View Post


    Also keep in mind that those competitor's machines come with Windows which could be viewed as inferior software along with their inferior hardware. Plus the current public perception that Mac does not get virus and OS X upgrades give the Apple machines a longer life before obsolescence.



    Hard sell for the competitors amongst consumers who actually do research before purchasing.



    Windows popularity appears to be on the decline. Unless you need it for compatibility with your office there is no logical reason to choose Windows in my opinion. Also it seems that students are overwhelmingly choosing Mac, at least judging by the number of Apple logos I see around Southern California.



    Very true. Apple has always been big on universities but last few years it has become HUGE. Another interesting development is Macs gaining adoption in businesses. More so with medium-small businesses, where growth has been quite huge. Law firms, medical practices, investment firms etc are examples. The popularity of iPhone/iPad and Macs in the home has been a huge catalyst. These days, much of the industry specific software businesses (esp smaller) use, are hosted services that connect via browser or native thin client. A huge barrier is business applications that are installed on desktops and/or company intranets, whereby very very few available on MacOS. Now that hosted and cloud services are becoming more mainstream, software is largely becoming OS agnostic.



    I know so many folks that have just recently dumped Windows and they just rave about it. When I ask where you been along buddy? I hear the response "I thought Macs were for geeks. I don't think that's true. Windows are for geeks." And they don't seem to think Macs are more expensive because they deliver so much more value making it a better purchase. I think more and more people will become aware of the value proposition .
  • Reply 19 of 57
    nagrommenagromme Posts: 2,834member
    Quote:
    Originally Posted by dualie View Post


    It's not going to stop certain Apple haters from spreading their misinformed (and usually borrowed) opinion that Apple products are across the board more expensive and therefore not worthy.



    I tried to price out an Air-equivalent from Dell, or as close as I could get. Bottom line: the closest Dell sub-12? machine with good performance (not Atom!) was still massively thick and heavy and cost hundreds more. Try it sometime. The goal: 2nd-generation Core i5 or better, SSD, under 12" screen, better than 720p resolution, less than .75? thick, less than 3 lbs., lighted keys, at least 4 hours battery. Of course, Dell limits your choices?they don?t want you to have an SSD in a low-end machine, just like Apple doesn?t want you to have a high-power GPU in a low-end machine. But an Alienware M11x was a start: better GPU etc., but much worse in other areas. And hugely expensive with an SSD.
  • Reply 20 of 57
    flaneurflaneur Posts: 4,526member
    Quote:
    Originally Posted by mhikl View Post


    For we who live in the world of Apple, this song is not so new but it is still so sweet.



    Very nice. That iambic pentameter can get under your skin. Works in prose, too, as you seem to show.
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