Manufacturers: MacBook Air Could Trump Intel’s Ultrabook

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Intel’s new ultrabook specification could help PC makers compete with Apple’s MacBook Air, but it may not be enough. Manufacturers are saying that if Intel can’t help them keep the price point down, Apple’s ultra-light laptop will undercut them, according to DigiTimes.

MacBook AirMacBook Air: Cheaper than a PC?

Concern over competing with Apple on computer prices counts as a red letter day on the irony calendar since PC makers have relentlessly said over the years that Apple’s products are overpriced. In this case, however, they’re worried about matching the US$999 of Apple’s base model MacBook Air

Apple recently updated the MacBook Air line by improving the computer’s processor and graphics chips, and adding a Thunderbolt port. The super-light laptop also relies on solid state storage instead of a hard drive and offers longer battery life compared to traditional laptop computers.

Despite the price concerns, PC makers are hoping they will be able to catch up the the MacBook Air with Intel’s ultrabook specification.

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13 Comments Leave Your Own

mouring

Wait a minute.. I thought Apples were overpriced BMWs in a world of PC Yugos… Now we’re seeing concerned that the Yugo makers can’t make a cheap enough PC to match the specs of an MacBook Air?  *BOOGLE*

Where is Dell when you need them!! *SMIRK*

[Note: Sarcasm Meter is hitting 11.. if you didn’t notice.]

Nemo

PC makers want Intel to lower the price of its chips so that they can match Apple’s price point for the new Macbook Airs.  However, I don’t that will help, because Intel, lest it risks violating U.S. antitrust law, must offer to Apple equivalent terms for its chips.  To do otherwise risks violation of the U.S. Clayton and Sherman antitrust Acts, because discriminating against Apple by offering PC vendors lower prices would restrain Apple’s ability to compete in the markets for ultra thin, ultra light notebook computers.

Intel doesn’t have to offer Apple better terms, but it can’t offer Apple worst terms.

BurmaYank

If I were SJ, I would wait until one or two PC makers actually managed to scrape together a “competitive” Intel-spec ultrabook, and then start a price war against them, underselling each, every time any new ultrabook might pop its head out in the world, by $50-100, again & again, until none dare try it again. 

Since Apple’s profit margins on its MacBook Air line are inevitably going to be so much fatter than such competitors’ could possibly be, the spectacle of those “MBA-Killer” PCs then dropping like mayflies after their single day in the sun, would be far more valuable & persuasive as MBA advertising than any Apple PR offensive could be, and should greatly accelerate OSX’s penetration into world/enterprise laptop markets.

And Apple’s ($70B?) cash hoard should be more than ample for going “all in” on this hand.

Nemo

Apple doesn’t engage in price wars as such.  It sells a superior product at an aggressive but profitable price that represents good to excellent value for the customer.  Competitors, at least not since Apple’s switch to Intel chips, have never been able beat Apple on price by selling a product of even roughly equivalent quality at a profit.  That is how Apple fights price wars.  If competitors want to sell at a loss, Apple will just wait them out, and with a loyal base of customers who prefer Macs and with $100 billion in the bank, Apple can easily do it, and its competitors know it.

BurmaYank

“Apple doesn?t engage in price wars as such.  It sells a superior product at an aggressive but profitable price that represents good to excellent value for the customer”

I can see what you’re saying is what Apple characterisically does.  But what Apple is doing with iPad pricing still does seem to me to be flirting with aggressively underselling its off-balance/disadvantaged competition in order to tip the market towards a pro-iPad inflection point.

Maybe Apple is thinking more aggressively from atop its golden pile, lately?

Nemo

Dear BurmaYank:  Apple has outstanding margins on the iPad at its current price points.  Apple is enjoying advantages in costs that comes from superior proprietary technologies, superior economies of scale, and superior financial ability to make advance purchase of crucial components at significantly lower prices.  That means Apple’s costs for its iPads is a lot lower, so Apple can sell the iPad at aggressive price points, while still making a ton of profit. 

Apple’s competitors lacking the advantages, supra, can’t match Apple’s costs and so are selling their tablets, when they are selling at all, at very thin margins.  Therefore, just because Apple’s prices are lower, don’t assume that Apple is sacrificing margin for share.  Because it costs are lower, Apple can and is lowering price, which picks up share and doesn’t provide any price umbrella for its competitors to sell under with lower prices.

It is a helluva fix to be in, having a much more expensive cost structure, as you compete against Apple in the markets for tablets computers, smartphones, and high-end personal computers.

Jake

Selling at a loss to win market share Would be contrary to past Apple practices.  And it would likely subject Apple to anti-trust claims for anti-competitive behavior.  Ironic given how the Justice department looked the other way for Microsoft’s 95% monopoly but likely given that Justice is already looking for an opportunity to reel Apple in.

mhikl

Apple shocked the competition with the pricing of the iPad. It seems like ancient history now, but at the time there were blowhards on every medium predicting $1000 Apple tablets and their own tablets being out very soon. When the $499 iPad was announced, the yacking came to a sudden halt, (as in shock sudden) and within a week or two M$ and others withdrew the imminent tablet dates.

The MBA is following the path of the iPad. The new MBA is purported to be faster than the MBP. I suspect the iPad, iPhone and MBA family is the path Apple is going to develop keeping the prices low, because they still make whoopee bucks, and they have more control over parts. (Have you seen a disassembled MBA. It’s a ghost town.)

I suspect old Apple hardware will continue its pricey history while the iPad and MBA will continue its price-less history. And the competition will never catchup.

I believe this follows from the idea that Apple did not follow down the suicidal trap of narrow-minded rabbit hole monetarism, with its emphasis on maximising quarterly growth and profits to the neglect of research, development and planning. (Why should a present CEO plan for the next CEO’s success? da!)

RonMacGuy

But mhikl, you forget the fact that Apple’s closed architecture will be its downfall very very soon!!

Soon no one will want any of Apple’s stuff!!  Someone told me this!!

grin

mhikl

But mhikl, you forget the fact that Apple?s closed architecture will be its downfall very very soon!!

I’d predict a fortnight. The end is near. And I predict the Tea Party are all going to convert to Islam and wear warm clothing in hot weather.

But in truth, someone’s end is near and it will only get nearer as Apple’s star arises, through the stratosphere. Then there will be dancing in the street and the clock will begin to count time again. (Can’t seem to get that tune out of my head.)

And I know who told you so. Listen wisely cause he speaks the truth, but he speaketh in riddles.

BurmaYank

Selling at a loss to win market share Would be contrary to past Apple practices.  “

“Selling at a loss…”, Jake? - I really can’t see how anything I said in my comment (which you responded to) could lead anyone to suppose that I was suggesting Apple should sell at a loss (in order to start the price war I suggested Apple should start against ?competitive? Intel-spec ultrabooks, by “... underselling each, every time any new ultrabook might pop its head out in the world, by $50-100, again & again, until none dare try it again.”)

I see no reason why Apple couldn’t very profitably & easily undersell every new Intel-spec ultrabook competitor by cutting $50, then $100, then $150, then $200, then $250, then $300, even $350, or $400, & maybe even $450, or $500, etc. below a MBA’s current price.  And that should never subject Apple to any reasonable anti-trust claims for anti-competitive behavior, since this would simply be Apple profitably making a better product cheaper than its competition is capable of doing (without ever selling at a loss). 

Do you still disagree that this would not be too different from what Apple has already been doing with iPods & iPads?

mhikl

I think you have it right BurmaYank, that this is Apple’s new stratagem with the iPad and MBA and possibly the iPhone. We will have to wait to see what wonderful toy Steven Claus will pull out of his toy bag and for how much.

With such a bankroll, advanced design forms and powerful supply sources, Apple may be able to challenge crap ‘n cheap with quality ‘n cheaper, or QC vs CC; and still rake in all the profits.

It’s a cancan kind of dance to take joy in. I bet Willie could sport some good words and soul to that tune.

Steve Webb

Apple removed the optical drive from the Mac Mini, and claimed that that move enabled them to reduce the price of the mini $100.00. Apple also reduced the price of OS X by $100.00.

That 1-2 combination is actually part of a longer kata that started with the Mac App Store and iCloud. Apple’s competition can’t drop optical drives until Microsoft stops shipping Windows on DVD, and only Microsoft can lower the price of Windows. It could happen….

The MacBook Air doesn’t have ANY rotating storage - no floppy, no winchester, no optical - so it can cut out the cables, connecters, drivers,  interfaces, and power supply, as well. The competition’s commitment to “flexability” and “upgradability” means they can’t match Apple’s ruthless disdain for costly “legacy” technologies - until Microsoft does. It could happen.

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