Intel, AMD take battle to new ultra-thin laptops

By Clare Baldwin - Analysis

SAN FRANCISCO (Reuters) - Laptops an inch thick that multitask and edit multimedia content, but cost only $500? Intel and AMD are betting they aren't too good to be true.

The world's thinnest laptops, usually the province of executives and the well-heeled, may this year go mainstream thanks to cheaper but still-powerful processors from Advanced Micro Devices Inc (AMD.N) and Intel Corp (INTC.O).

AMD got the ball rolling by enabling inexpensive thin laptops early this year. But Intel, with 80 percent of the processor market, may edge out its foe with its Consumer Ultra Low Voltage chip, or CULV, which promises longer battery life, computing power adequate for most, and a recession-friendly price.

The flip side? If the less-pricey ultra-thin form takes off, it may eat into revenue and profit for Intel's and AMD's blazing-fast high-end processors, analysts say.

"It's a pretty substantial threat" to pricing, said Endpoint Technologies analyst Roger Kay. "Any amount of volume it picks up there is going to shift the mix downward."

AMD partnered with Hewlett-Packard Co (HPQ.N) in January to launch the Pavilion dv2. Intel launched its rival CULV chip this month and Acer Inc (2353.TW) and Asustek Computer Inc (2357.TW) were among those that demonstrated laptops based on the new technology at the Computex trade show in Taipei.

Their premise? With more people gravitating toward mobile and wireless technology, consumers want smaller laptops -- and most of those people would prefer doing more than surfing the Web, which the no-frills netbooks now excel at.

Most people would never need the unbridled processing power that advanced, larger processors offer, analysts say.

UBS analyst Uche Orji said corporations and gamers would use high-end chips but most consumers would go with Intel's CULV chip.

"This becomes the core of consumer products," said Orji. "Intel's has 30 percent more battery life. Intel's will get up to 8 hours and AMD's we think is up to 5 hours, so Intel has an edge there."

Intel's director of mobile platforms product marketing, Uday Marty, said the company expects 20 percent of its consumer shipments will be for ultra-thins by the end of 2009.

A POTENTIAL PROBLEM

The PC industry, still struggling to recover from one of its worst downturns ever, badly needs more growth drivers.

Acer, the first company to introduce a cheap Intel-powered CULV laptop, expects revenue from that segment to account for 15 percent of its total sales by the end of 2009.

Asustek, which pioneered the netbook in 2007, plans to launch five consumer-priced ultra-thins this year.