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

post #1 of 58
Thread Starter 
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.
post #2 of 58
So the Apple tax on the consumer is finally revealed to actually be an Apple subsidy to the consumer.
post #3 of 58
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.
post #4 of 58
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.
post #5 of 58
Somebody followed Apple footstep yet again. Please anybody, try to be a leader for once.
post #6 of 58
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!
post #7 of 58
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

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post #8 of 58
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.
post #9 of 58
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.

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post #10 of 58
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
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post #11 of 58
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?
post #12 of 58
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!

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post #13 of 58
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.
post #14 of 58
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.

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post #15 of 58
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.
post #16 of 58
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.

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post #17 of 58
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.
post #18 of 58
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 .
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post #19 of 58
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 .
post #20 of 58
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 choicesthey dont want you to have an SSD in a low-end machine, just like Apple doesnt 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.
post #21 of 58
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.
post #22 of 58
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 think this could be a good thing, a VERY good thing for Apple. Think of the iPad competitors - you could have an Android 3.0 tablet for about the same price, maybe $50 less, but why would you when the product that consumers see as premium is about the same price?

Apple hardware is perceived as highly premium and therefore if the PC market can't undercut Apple by 30% like they have been able to do with cheaply designed and bulky PC laptops there is no way they can compete well.

What if a Mercedes was $25,000 and a Kia was $20,000? Wouldn't you just buy a Mercedes and keep it for a few more years? Even if the Kia was nearly identical in features and performance? Alarmingly (for PC companies) they can't even get this kind of price difference according to this article. I think that's a decent analogy.

In other words, people are simply less willing to buy a chunky laptop at a price discount anymore.

I think it's possible that the increased irrelevance of system specs for most people is a contributing factor. Now Apple

And of course, with more cash than the US Govt., Apple prepays for all their components and receives a hefty discount. It helps that the Macbook Air is selling like crazy.
post #23 of 58
There real question is why is Intel, an Apple supplier and partner, helping Apple's competition compete with Apple. Perhaps, Intel is worried the rumors of Apple moving the AirBooks to the ARM processor are true. Otherwise, Intel has no business assisting some partners at the expense of others.
post #24 of 58
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!

Re your edit point ... and the good news is with an Apple product they resell three years later form a good price. PCs three years old are not even wanted by Goodwill!
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post #25 of 58
Let me tell you how good Apple is my daughter who goes to usb had her computer which was less than a year old go bad she had a test on it they took all her information off it for only the cost of the external hard drive, they said because it had a ding on the monitor they might need to charge her to fix it, they not only fixed it with a new motherboard, they also put on a new monitor all this for no charge. She dropped her iphone a couple of months ago and broke the glass, she could use it but when she went in the other day to get it fixed we expected it to cost 200 they gave her a new on for free saying that this was the first time she had brought it in for repair. I wouldn't buy anything but apple products.
post #26 of 58
You guys want to know the Dominating brand at my office and the whole campus? ( I work at google hq in mountain view)

Apple

95% percent of the engineers riding around and even my bosses all have bright silver macs and some even have apple wireless keyboard connected to the work computers haaha
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post #27 of 58
Quote:
Originally Posted by mwhiteco View Post

Let me tell you how good Apple is my daughter who goes to usb had her computer which was less than a year old go bad she had a test on it they took all her information off it for only the cost of the external hard drive, they said because it had a ding on the monitor they might need to charge her to fix it, they not only fixed it with a new motherboard, they also put on a new monitor all this for no charge. She dropped her iphone a couple of months ago and broke the glass, she could use it but when she went in the other day to get it fixed we expected it to cost 200 they gave her a new on for free saying that this was the first time she had brought it in for repair. I wouldn't buy anything but apple products.

I think a lot of people have come out of an Apple Customer Service 'event' with a smile on their face going 'Wow!'. I have and even if they hadn't gone above and beyond it still would have been exceptional.
post #28 of 58
I have to believe that this kind of dominance -- even though utterly wrongly -- will start to attract antitrust scrutiny. Competitors are going to start to moan and groan about Apple using its high-volume supply chain to keep industry prices low, and there'll be some genius at the DoJ that springs a new doctrine of "supply chain efficiency as a weapon of market power". Wait and see. \
post #29 of 58
Quote:
Originally Posted by Flash_beezy View Post

95% percent of the engineers riding around and even my bosses all have bright silver macs and.......

Aluminum (or aluminium, for those across the pond).
post #30 of 58
It used to be that Dell's big advantage over everyone else was their production and distribution model. The knock on Dell (and a pretty fair one, I think) is that was their only advantage, and that they really didn't do anything innovative at all in terms of design.

How ironic is it that Apple is now surpassing Dell in production and distribution efficiencies while also maintaining a huge advantage in terms of design?

And then of course there's the infamous Dell quote from the 90s which hardly needs repeating...
post #31 of 58
Quote:
Originally Posted by anantksundaram View Post

I have to believe that this kind of dominance -- even though utterly wrongly -- will start to attract antitrust scrutiny. Competitors are going to start to moan and groan about Apple using its high-volume supply chain to keep industry prices low, and there'll be some genius at the DoJ that springs a new doctrine of "supply chain efficiency as a weapon of market power". Wait and see. \

I don't think it's too critical to see if Apple is using it's position for an unfair monopsony position. Now, if they are selling all they can get and they aren't forcing their would be competition out of the market with their buying power then it's all on the up-and-up.

PS: I'm saying that even though such an investigation would likely affect my valuation negatively.
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post #32 of 58
Quote:
Originally Posted by 512ke View Post

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!

The funny things is, how often could you actually upgrade? I remember when I wanted to upgrade back in my PC days in the 90's that more often than not I pretty much couldn't. A new processor would mean a new motherboard. A new motherboard would need new memory and probably there had been a change in the video card interface. In the end, whenever I upgraded all I ended up with was the same beige box with a completely different computer in it!

The thing that always needs to be factored in when thinking about Apple prices (and this was true when they were "more expensive" as well) is how much you can sell them second hand for.

I sold a 5 year old Macbook Pro (the first Intel one) earlier this year. It was broken (screen was totally shot - either needed a new screen, or the chap in the Apple shop said more likely a new mainboard), and yet I still got $275! For a broken computer!

I sold my wifes old Windows laptop around the same time. It was three years old, high end for the time, and crucially, worked, and I only got $255.

An older, broken Mac is worth more than a working newer PC - amazing!
post #33 of 58
Take USB ports for example. Mobile chip sets support more than two ports for example. Some of those ports are used internally but the point remains the electrical hardware is 90% of the way there already.

Quote:
Originally Posted by JupiterOne View Post

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.

The AIRs aren't bad machines at all, however it wouldn't take a lot to improve on them. In any event Intel has already failed here because of their focus on copying the physical size. It would have better to focus on user needs and new technology. In this regards Apples use of Thunderbolt is an obvious stradege to drive technology into the form factor.
Quote:
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.

At this point the only thing that frustrates me about the AIRs is the lack of internal storage capacity and no OpenCL support. Hopefully buy the time I buy again technology will have taken care of those issues.
post #34 of 58
Quote:
Originally Posted by anantksundaram View Post

I have to believe that this kind of dominance -- even though utterly wrongly -- will start to attract antitrust scrutiny. Competitors are going to start to moan and groan about Apple using its high-volume supply chain to keep industry prices low, and there'll be some genius at the DoJ that springs a new doctrine of "supply chain efficiency as a weapon of market power". Wait and see. \

It's a sad indication of the pathetic world we live in, but you're probably right.

I've actually been waiting for someone to pop up and claim Apples iTunes monopoly is forcing other tablet competitors out of the market.

It would be tragic, would hopefully fail, but with the profligacy of lawyers, will probably end up happening.....
post #35 of 58
Quote:
Originally Posted by PaulMJohnson View Post

It's a sad indication of the pathetic world we live in, but you're probably right.

Given that there was no serious anti-trust investigation of MS until they were way over 80% of share, and given that the same has applied to Google I'd say that it's pretty unlikely that we'll see a significant anti-trust investigation of Apple.

We might see a review if they try to pull off a big merger, but then that's standard operating procedure for competition authorities.
post #36 of 58
Quote:
Originally Posted by PaulMJohnson View Post

I've actually been waiting for someone to pop up and claim Apples iTunes monopoly is forcing other tablet competitors out of the market.

Except it was Steve Jobs who pushed the record labels into delivering DRM-free music, which meant you could play iTunes purchases on other hardware.

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post #37 of 58
Quote:
Originally Posted by PaulMJohnson View Post

I've actually been waiting for someone to pop up and claim Apples iTunes monopoly is forcing other tablet competitors out of the market.

But have yet to become a monopoly in music distribution. They are merely the largest single retailer of music. The last thing I read had music sales from CDs being larger than all of iTunes.
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post #38 of 58
Quote:
Originally Posted by solipsism View Post

But have yet to become a monopoly in music distribution. They are merely the largest single retailer of music. The last thing I read had music sales from CDs being larger than all of iTunes.

You really think good sense would stop an idiot lawyer?
post #39 of 58
Quote:
Originally Posted by solipsism View Post

Or even 3 years…


This graph is lumping mobile apps sales into the mobile phone profits as one.

It's not a good representative of the real data. Notice the drastic change from Q2 2008 to Q3 2008. Difference in categorization in the accounting books.

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post #40 of 58
Quote:
Originally Posted by Blastdoor View Post

And then of course there's the infamous Dell quote from the 90s which hardly needs repeating...

I need it repeated...... for some reason I can't rest until I know what it was!
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