The Ultrabook Opportunity for the ChannelBy Ericka Chickowski | Posted 2012-01-11 Email Print
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Ultrabooks are clearly the star of CES this year, and with channel-friendly companies behind them -- Intel, HP, Dell and Lenovo -- could these powerful and portable PCs be the answer to declining hardware margins and the rise of Apple?
The CES frenzy has set off a lot of interest in the ultrabook, a mobile computer that could spell big opportunity for the channel. With the portability and the performance to compete against MacBook Air, the ultrabook form factor offers businesses an alternative to Apple while still maintaining the manageability of a PC platform.
"I really think that the ultrabook effort, if it works the way Intel and its partners intend, I think it could create some interesting and really positive developments for the channel," said Charles King, president and principal analyst for Pund-IT, an IT analyst firm.
The rise of the ultrabook can be traced to Intel's announcement last August that it had set aside a $300 million fund to develop and market processors and invest in partner manufacturers willing to develop devices that fit a certain spec sheet developed by the Intel engineers. To officially be bestowed the 'ultrabook' title during this first phase of deployment, manufacturers must make their devices less than 20 mm thick, less than 3.1 pounds, price them around $1,000, use one of five Intel Core i5 or i7 processors and Intel's HD 3000 graphics subsystem, and ensure at least 5 hours of battery life.
"I think the channel can tell customers, 'You've got something here,'" said Laura Didio, principal of ITIC, an IT analyst firm. "You've got all the features, functions and the form factors you want and you're going to have to have great tech support at an affordable price."
However, partners must take care to differentiate these powerful PCs from netbooks, some coming in at the sub $500 level. Ultrabooks can be three times that price. Just this week, HP announced the one of the more anticipated ultrabooks expected from the CES crop, the new HP Envy 14 Spectre. Tagged at just under $1400 this slick little number is far from a bargain bin device, but it isn't meant to be.
That's where vendors and partners will need to work together to ensure success. Unlike the netbooks, these ultrabooks are not necessarily cheap throwaways. They're business devices meant to be aggressively priced for the performance and lightweight to be comparable with the MacBook Air.
"You always do pay a lot more for ultra mobility, but the real question is not so much the comparison of say the price of a Dell or Lenovo ultrabook compared to its other laptops. It's really a matter of comparing against the price of what Apple is charging for the MacBook Air," King said. "I would expect to see some very aggressive pricing coming out at CES that could really give Apple a run for its money." The MacBook Air starts at $999.
According to Didio, another consideration is to not forget about AMD. Sure, Intel is driving the ultrabook trend -- it was the one that invented the specs in the first place. But AMD is making processors and chipsets that can keep up and even if they may not be officially 'ultrabooks,' they still bring the sexy.
"Customers need not fear that AMD is way behind what you're getting in functionality in an Intel processor," Didio said. "They're making all the same efforts and hitting all the same features and performance function that Intel is. What AMD is doing is undercutting Intel on price."
In any event, channel partners should take heart, considering how the Apple resurgence in the business world has stepped all over the traditional channel's turf.
"The channel is looking at a vendor that is pursuing both its own retail efforts with the Apple stores and also expanding efforts with mainline retailers," King said. "If you're a channel player, you've got to look at that and say how can I compete against that?"
In addition to giving partners a viable business proposition for selling something mobile and sexy, a PC offering also provides a huge advantage to customers looking to solve the manageability problem that the influx of iPads and MacBooks has dredged up.
"Apple has been a very big player in those consumerization of IT developments. The company has a real cache among consumers, but it's also leads to some interesting challenges for IT shops as far as managing and securing those devices goes," King said. "I think the ultrabook could be a really interesting opportunity in the channel in that it gives channel partners products that are basically analogous in form and performance to very popular consumer products, but, since they're mostly Windows machines, they can be managed mostly seamlessly with existing business IT infrastructure."