Right on cue, the Windows 8 OEM and CPU storm clouds gather

Here we go.

This issue is like a 1000 pound gorilla in the corner that was always waiting for resolution.

Digitimes is reporting that Notebook vendors are having some trouble meeting Windows 8 hardware requirements in a cost-effective manner.

Since Ultrabook prices are still unable to drop to a desirable level, while notebooks that feature Windows 8 are likely to increase in costs due to Microsoft greatly promoting the software’s touchscreen capabilities, while the software will continue to remain at a high price , PC vendors are currently facing great pressure as strong demand may not emerge as they originally expected.

The sources pointed out that Intel is not willing to sacrifice its profits to reduce CPU prices, while PC brand vendors, facing operational difficulties, are also not willing to sell their products at losses, while notebook ODMs are already weak in profitability; therefore, even though ultrabooks are expected to greatly boost consumer demand, plans can only be postponed to a later time.

This is Apple’s competitive advantage over Microsoft – control of the hardware.

Microsoft vendor partners are in a tough spot with this one. Create sexy, sleek powerful, touch enabled hardware at low prices – an awful position to be in.

Since the vendors are all competing with each other, it’s hard for each of them to achieve the economies of scale necessary to lower the costs of these components for their Ultrabooks.

You also have to throw in the fact that this is a new concept (touch screen Ultrabooks) so it’s not a certainty that consumers want to use their fingers with a laptop.

So now the vendors are faced with a hellish choice:

  1. Spend tons of money to subsidize these units and hope that they will catch fire or
  2. Build the units at cost+profit KNOWING that they will sell less units

I’m not sure what the right decision is. Consumers will pay for perceived value ( Macbook Pros etc ) but it will be hard to justify $1500 to $2000 Ultrabooks.

Especially in light of the fact that many of those vendors already sell Ultrabooks in the $499 to $799 range.

What do you guys think?

Please Leave Your Comments Below...

  • Lord Blade

    I would really like to know what’s or who is your source that tells you the demand would not be as much as expected. And I would also like to know some data from the vendors who are currently saying that they’re facing difficulties with the Hardware Requirements and Pricing .. .. Quotes by the senior employees of the Vendors please. 
    And you should change the name of your website to Apple Update.

    • http://www.windows8update.com/ Onuora Amobi

      Blade, it might help if you read the quoted Digitimes article. It said ”
      PC vendors are currently facing great pressure as strong demand may not emerge as they originally expected.”

      I guess that’s my source.

      🙂

      Regarding the Apple update – hmm, not a bad idea for a site. Thanks..

      • NazmusLabs

        Apple Update

        There are way too many apple fan/news/blog sites already. Don’t know if it will make a difference to add another one.

        Yes, there is already a ton of windows fan/news/blog sites, but you have earned yourself a good reputation long ago. Perhaps you can stand out with an Apple Site (although, I will note that I have other apple news sites that I follow, so am not looking for another one.)

        • http://www.windows8update.com/ Onuora Amobi

          Which Apple sites do you follow? Just curious…

          • NazmusLabs

            Which Apple news sites I follow? Well, that’s an easy answer: every single tech site on the internet! Honestly, if there is even a single rumor the size of grain of salt, almost every single tech blog sites will cover it. If a rumor is a bit more credible, or even a crazy/while rumor with little basis, tech news sites will begin doing analysis on it. We all know it’s true. The tech press loves Apple like a kid loves delicious apple pies.

            In a bit more serious tone, though, I do follow dedicated Apple news sites/sources. For one, I listen to MacBreak Weekly on the TWiT network. As a regular Tech News Today listener on the TWiT network, very few Apple stories are missed. I am also a writer at Techtronica, a tech news site (http://techtronica.net) and we have some writers that are big fans of Apple products (unsurprisingly.)

            From a news website, Gizmodo loves reviewing new apple products, so there’s plenty of that. MacBreak does a great job at analyzing Apple’s strategy. Finally, I enjoy reading Mr. Paul Thurott’s rants about the tech press unconditional love for Apple on his weekly “Win Info ShortTakes.” Oh and finally, we have apple coverage on my favorite podcast as well: “Windows Weekly”, (that’s where I learned of you for the first time, actually).

            Cheers!