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PC makers losing interest in tablets, hope Ultrabooks will improve margins

post #1 of 72
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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.
post #2 of 72
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.
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post #3 of 72
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.
post #4 of 72
Why would these guys give up on tablets... they were doing so well...
Hmmmmmm...
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Hmmmmmm...
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post #5 of 72
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.
post #6 of 72
Quote:
Originally Posted by Apple ][ View Post


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 ?
post #7 of 72
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.

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2011 13" Core i5 Macbook Pro | Intel 520 SSD | 8GB Corsair DDR3 1333 | OSX 10.7
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post #8 of 72
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...
post #9 of 72
Quote:
Originally Posted by AHrubik View Post

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?
Hmmmmmm...
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Hmmmmmm...
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post #10 of 72
Quote:
Originally Posted by gprovida View Post

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.
post #11 of 72
Quote:
Originally Posted by gprovida View Post

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.
post #12 of 72
Quote:
Originally Posted by AHrubik View Post

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.

nice sarcasm ! I almost fell for it.
post #13 of 72
Dream on. Apple is buying into the world of Flash and if it plays its cards right, World Dominance in Air and UltraLights is its to hold.

And . . . Amazon is Apple’s best bud. Apple takes the high road and Amazon takes the cheap ’n low and the squeeze on anything in between is as painful as can be. No profits for Amazon, Apple’s raking in the loot and now all it needs to do is sacrifice some profits on the 11 inch and squeeze until the competition goes broke.

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When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

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post #14 of 72
Quote:
Originally Posted by AHrubik View Post

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.

Your post has a little too much hyperbole for my taste, but I do think Windows 8/Metro tablets are going to be a real contender where Android has (thus far) failed to become much of one.

I think we've only really seen evidence that PC makers are losing interest in Android tablets. And they never really had any interest in Windows <7 tablets.
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post #15 of 72
I'm wondering where exactly they see these margins in ultrabooks coming from - aren't these the same manufacturers who a few months ago were begging intel for price cuts because they couldn't even get their BOM to be lower than the selling price of the macbook air?
post #16 of 72
Quote:
Originally Posted by Apple ][ View Post

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.

They appear to be centered under the space bar. I have two laptops in front of me at the moment. One has a numeric keypad that moves the whole keyboard to the left and the trackpad is under the space bar. On the other, the right side has the navigation keys. Again, the keyboard, space bar, and trackpad are off to the left a bit.

Another commented on people walking around with laptops open and horizontal: That happens here as well. The answer I got when I asked is that everyone is terrified that if they close the lid and cause the laptop to go to sleep it may. like, never wake up.

I always take an opportunity to clearly display my iPad and rub it in that they should be carrying one of them instead. Heh.
post #17 of 72
Apple has so many bullets ready to fire... when it's around time.

The problem is, that all these 'competitors' have no domestic software&services ecosystem. Even the biggest one, Samsung, is just relying on Windows (Notebooks) and Android (smartphones,tablets), but doesn't own an ecosystem for binding customers: You could replace your Samsung laptop by a Sony or HP and wouldn't miss anything. That's not a feature, it's a fault: Devices have to integrate and who could do that better than the integrator #1, Apple ?!

With iCloud, Apple has the 'thermonuclear' weapon already rolled out. They could add a million other features & services to it, further integrate with home entertainment, social networking and on and on. They earn their money from selling devices but for you as a user they make the single device as unimportant as possible. Whatever device is next to you, whetever is best suited, will do the job for you, if 3,5" or 27". The UI unified, the communication protocols well adjusted, it just works, and works best.

Compare it with car business, where todays car makers are all integrators and sell you cars that 'just work' too. And now imagine all dozens of 'open' companies, selling you motors, seats, frames, wheels separately. They'd say: 'This is about being Open !'. But this is not how it works today.

And so all these companies which do not integrate, will fail. They'll disappear. No Samsung, no HTC, no Acer. Google is an integrator, HP could become one (latest WebOS decision was wise). But the rest will just disappear.

In 2013 every hardware sold needs to fit into a cloud based ecosystem, which is serving the full range of services and device form factors. If MS stays at 1% in the mobile market then even desktop Windows will be irrelevant in 2016.
post #18 of 72
In 12 months the industry will move away from 'ultrabooks' to TV settop boxes, after Apple has rolled out Apple TV3 in January.
post #19 of 72
Ultimately you are left with a bunch of PC vendors who have no value-add and simply resort to lower prices as they attempt to win sales from their competitors. Just like Dell, who ignited a race to the bottom of the profit margin. Congratulations Dell, you made it to razor-thin margins, poor customer service and less than spectacular products.

The PC vendor will find itself in the exact same spot it is in right now. Look how they are already falling over one another to get the prices sub $1m.

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post #20 of 72
Quote:
Originally Posted by mhikl View Post

Apple is buying into the world of Flash and if it plays its cards right, World Dominance in Air and UltraLights is its to hold.

The rumored acquisition of Anobit would bolster this view. If Apple is able to take the lead in cost/bit for large Flash systems (Anobit's forté), competitor's margins will be further squeezed while Apple enlarges the performance envelope of the Air family.

Apple's manufacturing volumes are now sufficient to justify vertical integration into the silicon supply chain. Every additional disintermediation makes it that much harder for others to compete.
post #21 of 72
Quote:
Originally Posted by jm6032 View Post

Another commented on people walking around with laptops open and horizontal: That happens here as well. The answer I got when I asked is that everyone is terrified that if they close the lid and cause the laptop to go to sleep it may. like, never wake up.

It is a real issue on a lot of laptops, you can't bring them back out of sleep. Perhaps there is an esoteric key combo but it mostly isn't the power or even sleep button. It is really weird.

It has been like it for years.
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you only have freedom in choice when you know you have no choice
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post #22 of 72
What manufactures need to start doing is creating tablets without Android and take a risk, even if it means having small number of Apps at the start. And sell it as a revolutionary new start-up company that knows about what a tablet should do.
post #23 of 72
Quote:
Originally Posted by jm6032 View Post

Another commented on people walking around with laptops open and horizontal: That happens here as well. The answer I got when I asked is that everyone is terrified that if they close the lid and cause the laptop to go to sleep it may. like, never wake up.

Quote:
Originally Posted by cy_starkman View Post

It is a real issue on a lot of laptops, you can't bring them back out of sleep. Perhaps there is an esoteric key combo but it mostly isn't the power or even sleep button. It is really weird.

It has been like it for years.

Not trying to defend Windows here, but I think the reaction is a throwback to Windows XP's inability to come out of hibernation. I myself, marveled at my 1st Mac's ability to do what no other Windows machine was ever able to do, come back reliably from sleep mode. It wasn't until recently that Windows machines started to be able to do this with Win 7. But even that isn't always reliable. So, those users are still afraid that sleep mode, even on Win 7, will be like it always was, unreliable.
post #24 of 72
"Hey, we aren't doing so well ripping off Apple's iPad idea, let's try ripping off their MBA instead. That will be sure to work!"
post #25 of 72
Quote:
Originally Posted by gprovida View Post

Interesting - Fundamental Problem - there is NO good margin PC business

Exactly right. The sad reality for the PC guys is that consumers have such a dim view of their brands that they *have* to sell their products for a lower price than Apple's because people assume that the Apple product is better and that the only advantage of a PC is that it's cheaper. What a sh!tty situation to be in if you're a PC maker. But they did it to themselves.
post #26 of 72
I love it when people talk about how MS is just a product away from taking over the world. This year, it is W8. Last year, it was W7, the finger friendly OS. Today, you can get a W7 tablet in just about any formfactor you can imagine. You can scoop them up for free in landfills all over the world. Having used W8, I can tell you that it will not move the needle at all. In fact, I think it is a step backward. It is a steaming mess of bad ideas and poor implementation. Good luck with that.
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post #27 of 72
Quote:
Originally Posted by henniman View Post

In 2013 every hardware sold needs to fit into a cloud based ecosystem, which is serving the full range of services and device form factors. If MS stays at 1% in the mobile market then even desktop Windows will be irrelevant in 2016.

Unless all enterprise software starts to run on non-Windows machines, and somehow manage to scale themselves down to work on tablet/phone size screens (impossible IMO), Windows desktops will be around long after 2016.
post #28 of 72
Quote:
Originally Posted by jm6032 View Post

The answer I got when I asked is that everyone is terrified that if they close the lid and cause the laptop to go to sleep it may. like, never wake up.

It may be force of habit in these days windows 7 and (almost!) reliable wake from sleep, but the first thing I do on any windows laptop I am using long term is turn off the "sleep on close of lid" option in the power settings...

I've had far too many bad experiences in the past...
post #29 of 72
Quote:
Originally Posted by gprovida View Post

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....

'sewn'
post #30 of 72
Seems to me it should be the phone makers, not PC makers who concentrate on tablets. After all, they're just big smart phones.
post #31 of 72
Quote:
Originally Posted by xavier83 View Post

What manufactures need to start doing is creating tablets without Android and take a risk, even if it means having small number of Apps at the start. And sell it as a revolutionary new start-up company that knows about what a tablet should do.

Uh, that's what Palm did. They got bought out by HP who released one tablet and promptly killed it off after the marketplace yawned.
post #32 of 72
Quote:
Originally Posted by island hermit View Post

Why would these guys give up on tablets... they were doing so well...

Because Samsung makes more profit from notebooks then tablets. Tablets are very expensive to make comparing to a notebook. The reason why Apple makes so much money is because iPad is tied into Apple's eco-system of iTunes, App Store and Apple's software products. This allows Apple to directly tie profit from its eco-system into profit from iPads. Samsung does not get any kind of income from Android, they package their hardware and send it off, never gaining any profit in the future.
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post #33 of 72
Quote:
Originally Posted by DaveMcM76 View Post

I'm wondering where exactly they see these margins in ultrabooks coming from - aren't these the same manufacturers who a few months ago were begging intel for price cuts because they couldn't even get their BOM to be lower than the selling price of the macbook air?

I wondered the same thing. The entire premise is that "ultrabooks" will raise PC margins, and yet, last we knew, they couldn't be built at decent margins.

Something fishy here.
post #34 of 72
The PC OEMS are a lazy group. They don't control jack s*** on the PC. MS controls 5000 patents pertaining to the PC. The only thing the PC makers do is crank out some else's intel property, pass them their royalties and pocket what's left. This is why I have always blogged about why it is so good that apple controls their software and most of the hardware.
I told so many that apple is an engineering company at its core.
If apple gets that Isreli flash drive company they are on their way to becoming like Samsung. Now they need a monitor outfit. So the trifecta for them would be chips, flash and video panels. Damn!
post #35 of 72
Dear <insert clone computer maker here>,

Thanks for all those fat checks. I realize you have next to nothing left in your pocket after cutting me the check, but think of all the new sales you will get with <insert windows version here> in the future. Keep racing to the bottom, that is your ticket! I don't mind of course because i know you will keep sending me those fat checks for the pleasure of using <insert windows version here>. In the upcoming <insert windows version here> you will have the ability to differentiate your cloner computers by changing the background color! Keep up the good work

Thanks.
Microsoft
post #36 of 72
Quote:
Originally Posted by iVlad View Post

Tablets are very expensive to make comparing to a notebook.

Actually, ultrabooks aren't that cheap to make either, and with Apple's cheapest Macbook Air going for around $900-$1000, it's going to be difficult for others to make people choose their copy instead.

As the developer of the ultrabook platform, Intel previously stated that the target retail price is below $1000. However, only a fraction of the first crop of ultrabooks hit that target with most costing more. Digitimes sources stated that the current cost of components makes the target difficult with a 13-inchs bill-of-materials generally around $690.

http://techcrunch.com/2011/11/29/ult...2-says-report/
post #37 of 72
Quote:
Originally Posted by AHrubik View Post

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.


Haha..Good Joke...Windows..keep it rolling....lol
post #38 of 72
Ask companies what business they are in. If they answer "computers" their downfall has begun. If the answer is building an environment and not machines, they will succeed, in much better shape. If the answer is "telephones" and not "communications", they died, as Ameritech. If the answers "logistics" and not "package delivery", they have a good chance, as in UPS vs Railway Express, a long time back. That is part of the success of a Steve Jobs.
post #39 of 72
Quote:
Originally Posted by jm6032 View Post

They appear to be centered under the space bar. I have two laptops in front of me at the moment. One has a numeric keypad that moves the whole keyboard to the left and the trackpad is under the space bar. On the other, the right side has the navigation keys. Again, the keyboard, space bar, and trackpad are off to the left a bit.

Another commented on people walking around with laptops open and horizontal: That happens here as well. The answer I got when I asked is that everyone is terrified that if they close the lid and cause the laptop to go to sleep it may. like, never wake up.

I always take an opportunity to clearly display my iPad and rub it in that they should be carrying one of them instead. Heh.

It's past experience of the sleep mode or hibernation screwing things up. My work's Toshiba resumes 80% of the time, which I assume is down to their drivers. In my experience it's the only time I still see the blue screen from Windows 7.
post #40 of 72
OFF TOPIC - but just want to comment on the fact that this and the previous thread have reached 40 posts and the discussion is civil and hasn't degenerated into and endless stream sarkiness.
Can anyone spot why?
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