Asustek and Acer Take On Apple MacBook with Ultrabook Laptops

Responding to Intel's battle cry for Ultrabook to enter the PC market, Taiwan's Asustek Computer Inc. and Acer Inc., both globally top-five PC suppliers by market share, are ready to take on the Apple MacBook Air with Ultrabook laptops.

The success of Apple's Macbook Air, iPhone and iPad has been a blessing for Apple fans but a bane for traditional PC vendors, whose market shares are being encroached. With growing market shares being taken by Apple, traditional PV makers as Hewlett-Packard has even considered giving up the PC business to turn to providing non-hardware services.

Another reason behind PC makers' inertia in the traditional PC business is the ever- thinning profitability, due to mature production technologies of conventional desktops and laptops that are within grasp of many rivals, hence fueling me-too products that survive by underselling that undermines sustainable margins for manufacturers and vendors. These factors, coupled with still uncertain global economic recovery, have dampened the global PC industry this year.

To reverse the downturn of the industry, Intel has come up with the next-generation laptop design in the Ultrabook, which is slimmer and lighter than traditional laptops and features better hardware. Comparable to Macbook Air in aesthetics and functionality, Ultrabook is giving new hope to traditional PC suppliers as the answer to industrial turnaround.

Acer
Leading the charge against Apple is Acer, which has begun in mid-September delivering its Ultrabook Aspire S3 to distributors and retailers worldwide. Manufactured by Wistron Corp. and Compal Electronics Inc., the laptop is available with a choice of an Intel Core i3, i5 or i7 processor, 13.3-inch screen, aluminum alloy housing, and exterior as slim, compact as Apple's MacBook Air.

The Aspire S3 has 320GB or 500GB hard drive or optional 240GB solid state disk (SSD) drive, WiFi and Bluetooth 4.0 connectivity, 1.3-megapixel webcam, two-in-one card reader, 7-plus-hour battery life, speedier reboot and Internet-connection, and retails between euro 799 and 1,199. Acer projects single-month sales to reach 100,000 units by the end of this year and higher the next year.

Scott Lin, corporate vice president and president of Acer's TWN Operation, says global sales of laptops and netbook PCs have totaled nearly 290 million units in recent years, around 30% of which attributable to their lightweight and compactness. Ultrabook PCs with a 13-inch screen weighs only 1.3-1.4 kilograms, so are likely to be popular, whose sales can optimistically reach 80 million units a year, says Lin.

Few would disagree that Acer has ample reason to promote Ultrabooks for the company tumbled in Europe's notebook PC market with plummeting sales in the first half, and so is eager to recover. Acer's earnest attempt to get back on the horse is confirmed by being the PC supplier to debut the first Ultrabook, which it sees as the remedy to the downturn. Once consumers flock to the Ultrabooks, Acer will be well on the way to rebuild sales with its relatively higher margins.

Asustek
Taking after Acer, Asustek will also launch its Ultrabook UX on October 11, with its chairman Jonney Shih and CEO Jerry Shen to preside over the presentation in Taipei and New York, respectively, simultaneously.

Blogging news headlined “Good things come to those who wait,” Asustek, which debuted its UX21 at Taipei Computex 2011 in late May, has worked painstakingly on the launch. The UX21 has drawn intense media attention globally even before market launch. For example, the Italian news website NotebookItalia reports that the UX series is available with 11.6 and 13.3-inch screens, as well as a choice of Intel's Core i5 or higher processor. And the UX Ultrabook laptop is only 1.7cm thick and 1.1kg, with built-in ICEpower amplifier from the cutting-edge Danish audio system maker Bang & Olufson. The 11.6-inch UX will retail for euro 799 and the 13.3-inch model for euro 999 or euro 1,199.

Shen said recently that five to six UX models will be marketed initially, priced from US$799 to US$1,199, which is cheaper than Macbook Air that go for US$999 to US$1,599.

Unlike its Taiwanese counterpart Acer, Asustek, flagging PC market notwithstanding, has been on an uptrend this year, due partly to its successful marketing strategies in emerging markets, and partly to its hot-selling tablet Eee Pad Transformer, which has been reported by global market researchers to confirm Asustek's rise.

For instance, the Chinese market researcher Enfodesk reports that Asustek scored a 4.2% share as the fourth-largest tablet PC brand in China to outpace Motorola and Lenovo in the second quarter, when 1.4414 million tablets were sold in the country, where Apple dominates with a 74.3% share. Another report by IDC (International Data Corp.) shows that Asustek has unseated Acer to lead notebook PC brands in Eastern Europe with a 21.7% share in the second quarter.

Asustek is counting on Ultrabook PCs to drive business growth in the future.

Pricing is Decisive
Launching Acer's Aspire S3 and Asustek's UX signals that traditional PC suppliers are not giving up laptop market shares to Apple without a fight, with market observers pointing to pricing as the decisive factor.

The first-edition Macbook Air, launched in 2008 for US$1,799 each, was an expensive laptop that became a niche product, contributing only 5% to Apple's Macbook sales in the year. Then Apple launched the second-edition Macbook Air at only US$999, a smart move resulting in improved sales to command a 25% share of Apple's overall laptop shipment as of the end of the second quarter of this year, say the observers.

As price will decide success of Ultrabook PCs against Macbook Air, the observers say the next-generation laptop is not likely to be significantly more popular until production costs drop further next year. Besides, they warn that PC suppliers' expectation for Ultrabook success may be mere wishful thinking since Macbook Air has basically similar exterior design, and price advantage may be insufficient as trump.

The observers add that haphazard pricing strategies will also backfire, as drastic reductions inevitably lead to cut-throat underselling among players to jeopardize profitability of Ultrabook PCs, although helpful to drive up sales in the short term.

To-be-launchedUltrabook PCs This Year
Supplier	Model	AvailableScreen Size	RetailPrice
Acer	AspireS3	13.3inches	euro799-1,199
Asustek	UX21,UX31	11.6,13.3 inches	euro899-1,999
Lenovo	IdeaPadU300s	13.3inches	US$1,199
Toshiba	PortegeZ830	13.3inches	AboutUS$1,000
Samsung	Series9	11.6,13.3 inches	US$1,149-1,599