Intense Intel-AMD rivalry set for light laptops

The CEOs at the chipmakers see competition heating up in the market for sleek, inexpensive laptops running Windows 7.

The chief executives of Intel and Advanced Micro Devices indicated this week that competition will heat up in the market for sleek, inexpensive laptops running Windows 7.

Both CEOs addressed this new market during conference calls after their companies reported earnings this week. Ultrathin laptops are inexpensive, light laptops--typically between $500 and $800--that are sold in a market segment just above less expensive Netbooks.

Intel CEO Paul Otellini on Tuesday said his company is gearing up to supply more power-efficient chips that contain two processing cores for better performance. "The bulk of the units that have shipped to date were single-core versions of the products," Otellini said. "You'll see a number of laptops show up in retail with the dual-core versions for the holiday season...more ergonomically designed, thinner, lighter," Otellini said.

HP's Pavilion dm3 starts at $549 with an AMD processor and $649 with an Intel processor.
HP's Pavilion dm3 starts at $549 with an AMD processor and $649 with an Intel processor. Hewlett-Packard

And AMD's CEO Dirk Meyer chimed in on Thursday. "You'll hear more...next month about the product lineup that we'll be rolling out over the next two years, which will include increasing focus on those small form factor notebooks," Meyer said during AMD's conference call. In the more immediate future, Meyer said AMD will have a "broader assortment of (ultrathin) platforms walking into the Christmas cycle."

To date, this new category of laptops has had a minuscule market-share impact because there was little perceived difference between a Netbook and an ultrathin, according to Bob O'Donnell, IDC research vice president. "A lot of people said this is not actually that much faster, so you're going to see a very rapid transition to all dual-core," he said.

Windows 7 should accelerate sales too. "I think we will see better sales next year," O'Donnell said, as HP, Dell, and others bring out ultrathins with Windows 7.

The category received a boost recently with the rollout of HP's Pavilion dm3, which starts at $549 with an AMD processor and $649 with an Intel processor. The dm3 is expected to be available starting October 22 with the launch of the Microsoft Windows 7 operating system.

Other high-profile ultrathins include the $548 Acer Aspire Timeline (at Wal-Mart) and the $549 Dell Inspiron 13.

Because ultrathins are more expensive than Netbooks, they are more profitable for Intel. "Part of Intel's strategy is to pull people up from a Netbook," said O'Donnell.

AMD, on other hand, is focusing solely on the space "between Netbooks and mainstream notebooks," Meyer said, adding that AMD, in effect, created the ultrathin category with the introduction of the 12-inch HP Pavilion dv2 back in January. "We created that category really in partnership with the HP," Meyer said.

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