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Intel's Ultrabook Investment Won't Save PCs -- Their Day Is Done

Intel (INTC) must think that ultrabooks -- the super-thin, super-light devices that are supposed to go head to head with the Apple (AAPL) iPad and MacBook Air -- are the PC industry's future. The company will open a $300 million fund to help drive innovation in the ultrabook concept. Something small and light that can go all day on a single battery charge, just like those products from... well, from You-Know-Who in Cupertino.

Such a pity that the investment will be worthless. Ultrabooks will come to nothing. Traditional PC vendors would have to design and make the new computers, and their commitment to innovation has clearly calcified. It's part laziness, part desire to pocket money rather than invest it, and part the natural consequence of the low-margin business model they helped create and support.

Executives at place like Dell and Hewlett-Packard (HPQ) have worked so hard to keep PCs going that they can't envision their end, which is why they've been unable to respond effectively to Apple all along. Macs have raced away in market share, at least in the U.S., because they offer things that consumers want and that Intel admits can't be found in a PC:

  • thin size
  • light weight
  • long battery life
  • rapid boot-up from flash memory rather than hard drives
PC vendors have known how important this stuff is for years. Three of the traditional major stats in laptop comparisons are size, weight, and battery life. The only reason that rapid boot-up was never in the panoply was because Windows was under Microsoft's control and vendors were happy not to develop products that would be able to run it faster.

After all, why invest when one of your basic assumptions is that people won't spend more money to get the features they really want? Never mind that Apple proved that dictum false years ago. As far as the PC industry was concerned, Windows and Intel chip architectures ruled the world, and people had to get along with that whether they liked it or not.

And now we face the final curtain
The irony is that major PC makers could have developed lighter, faster, more power-efficient laptops at any time. Apple has shown that the technology exists. The HPs, Dells, and Acers of the world saw its development, step by step.

Even Intel could have addressed this market failure through new chip development and reference designs. Instead, it stayed stuck in its comfortable rut. That's why ARM chip architecture became so popular in mobile phones. Intel hadn't bothered to create a low-power chip, and so ceded the market. Now things have gone so far that Apple is threatening to switch away from Intel processors in its Macintosh line.

Yet somehow no one in the PC industry assigned much import to the shift toward lighter and better laptops. Certainly no one did much about it.

We did it our way
Oh, there have been some fatuous attempts. Take the netbook, for instance. These stripped-down notebooks devices can be handy, but, come on -- they were deliberately underpowered to keep from undermining the cash cows -- fully featured desktops and notebooks. Hardware vendors wanted to make sure that anyone who bought a netbook still needed a full (higher margin) PC.

In short, the PC industry has buried its head in the sand to avoid confronting the fact that the PC's day is all but done -- just as happened to typewriters and mechanical adding machines. That's why Intel can spend $300 million on "ultrabooks" and it won't mean a thing. You're hardly funding innovation when you're only playing catch-up.

The people who make the decisions in the industry aren't driven to do anything better. They've been beaten down by decades of relentless cost-cutting and the outsourcing of innovation to the former Wintel monopoly. Now, cheap has just about run its course at the same time Wintel is running out of gas, and no one knows what to do. Don't expect that to change, no matter how much green Intel is willing to flash.

Image: Intel
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