When Intel asked designers to build a better laptop, its instructions were simple, really. The machine has to be fashionable, able to connect to all manner of wireless networks, and full of the latest, fastest computing capabilities. Oh yes, and make it as thin as Motorola's Razr. Its own engineers in conjunction with Ziba Design in Portland, Ore., rose to the challenge.
The result, code-named Intel mobile Metro notebook, is less than 0.7 inches thick—about one-quarter of an inch thicker than Motorola's (MOT) iconic cell phone, making it the world's thinnest notebook. And at 2.25 pounds, it's also one of the lightest small-sized portable computers. Other features include always-on Internet connectivity via various wireless technologies.
And unlike other computer prototypes, including some from Intel, this one actually may line the shelves of a retailer before long. Intel hasn't announced an official release date but people familiar with the matter say a PC maker will announce plans to start manufacturing the machine later this year.
Thin Notebooks, Fat Margins
The laptop—the only notebook design expected to come out of Intel (INTC) this year—was first showcased at an Intel Developer Forum in Beijing in April, but designers gave BusinessWeek.com an exclusive, up-close look at the technology and ideas behind the project. If manufactured and sold on a wide scale, the creation could have a lasting impact on computer design, use, and marketing.
That, in turn, would be good news for chipmaking colossus Intel, which has seen sales slump amid a price war with archrival Advanced Micro Devices (AMD). Plus, it's keen to rev up demand for the computers running on its processors. The device might rely on Intel chips not just for computing but also for memory and connecting to wireless networks. The prototype also incorporates technologies developed by companies financed by Intel Capital, the chipmaker's venture capital arm.
Intel would especially like to see higher sales of portable computers, particularly fatter-margin devices at the high end of the market. Sales of laptops priced at $2,000 and above are rising 1.4% a year, compared with 73.5% for notebooks priced $500 to $999, according to researcher IDC (IDC). That's in part because sales of PCs to corporations, often the biggest buyers of high-end laptops, are slowing.
Consumers, as a result, are a big driver for sales. And more than ever, consumer-buying choices are influenced not just by function, but form. At the same time, many PC makers have given short shrift to design in hopes of keeping costs at a minimum.
That's where Intel, with Ziba, hope to make their mark. "Intel wants to stimulate the conversation," says Roger Kay, president of consultancy Endpoint Technologies Associates. Besides making the machine thin, they're also using materials aimed to communicate high quality and coolness. Made of champagne-colored magnesium, the laptop is decorated with subtle gold accents.
"It's like jewelry," says Omer Kotzer, a creative director at Ziba, a firm renowned for consumer-electronics design (see BusinessWeek.com, 10/11/05, "Sirius Radio's Radical Handheld").
And like cell phones, which come with different ringtones and in different colors, this laptop also strives to be a personal fashion accessory. The computer comes with a diary-like folder that attaches to the laptop via magnets. The folder, available in different colors, also functions as a wireless charger for the device. One side features a screen made of material devised by E Ink, one of the recipients of investment by Intel Capital. It can display a picture, the calendar, or your schedule for the day.
"It was inspired by traditional stationery," Kotzer says. "It ties back to premium stationary that used to be bound in beautiful leather." A special shoulder strap, matching the folder in material and color, can be attached to the laptop, turning the computer into a makeshift purse.
Though designers say the product is unisex, as a fashion accessory it may carry particular appeal to women, a group Intel has long wanted to win over. "Increasingly, women are often the decision makers, particularly with high-end purchases," says Richard Shim, an analyst with IDC. "More and more companies are starting to pay more attention to the female market segment."
But Intel wants to ensure the laptop appeals to wide range of users. "As a market matures, vendors who focus on particular market segments tend to do better," Kay says. Patrick Lynch, an Intel manager, says the design is geared toward any professionals on the go—for instance real-estate agents and salespeople who tend to work from different locations, such as Starbucks (SBUX), cars, and other companies' offices.
These users might appreciate this device's always-on wireless connectivity. Today's laptops can connect to Wi-Fi wireless networks but require special cards to surf the Web via cellular networks. This model's embedded chips let users access cellular, Wi-Fi, or WiMax wireless broadband networks. (Intel is expected to release embeddable chips that access all these networks in late 2007, early 2008.)
Embedded cellular connectivity could change the way laptops are sold. In the U.S., cellular network technology varies by carrier. So PC manufacturers might have to start selling special adapter cards, such as the Subscriber Identity Module (SIM) cards used by some carriers in Europe. Or the laptops may need to be marketed through the service provider for whose network they are designed.
The laptop contains other features its makers hope will resonate with users. It includes so-called small array microphones from Fortemedia, another company funded by Intel Capital, designed to cancel out background noise, often experienced by fans of Web-calling applications like eBay's (EBAY) Skype. The computer also is built to enhance security, boasting a fingerprint reader and a mechanism that lets users kill a hard drive by remote control.
Of course, whatever version of the computer makes it to market may not include all these features. And if it does, it's not clear the machine will be available at the right price. For Intel, "price was not a concern," says Bob Sweet, account director at Ziba. The same can't be said for PC manufacturers, whose margins are under pressure.
Still, Intel and Ziba hope the device wows some segments of the market. "If you want to make a splash in the market," Sweet says, "this is the way to do it."
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