Is Intel Ultrabook Superior to iPad, MacBook Air?

Intel Corp. is putting significant weight behind ultra-slim Ultrabook in the Intel Developer Forum, which would be a threat to Apple Inc.'s iPad and MacBook Air.

The Ultrabook, which comes with Intel chips, is an ultra-slim laptop (much thinner than MacBook Air) that averages 0.66-inch thick, running Windows 7 and will cost less than $1,000.

Four big-name computer makers have already signed to produce skinny laptops under Intel's Ultrabook trademark, including Toshiba, Asus and Lenovo.

Major laptop manufacturers like Foxconn, Pegatron, and Inventec are showing fully functional Ivy Bridge Ultrabooks on the Forum conference, according to CNET.

Ivy Bridge is the chip design that follows the current Sandy Bridge processor. It is the first to use Intel's touted 3D transistor technology and offers a substantial boost in graphics chip performance, among other new features.

Intel's Chief Executive Paul Otellini highlighted Ultrabook, which was launched at the COMPUTEX trade show in June, as the company's vision for the most complete and satisfying PC end user experience in the first day of Intel Developer Forum.

Ultrabook's form factors and specifications expected to drive leadership in the next-generation of mobile computing, which Otellini characterized as being superior to Apple Inc.'s iPad and MacBook Air capabilities combined.

The Santa Clara, California-based chip giant expects Ultrabook shipments to ramp in fourth quarter, and accelerate with its 22nm Ivy Bridge platform in 2012.

Intel and Google Inc. jointly announced their partnership for optimizing the Android OS for Atom-based MPUs targeting Smartphone and Tablet.

Intel demonstrated a Medfield-based Smartphone running Android Honeycomb, and set investor expectations for Smartphone product announcements from handset original equipment manufacturers (OEM), starting as early as fourth quarter of 2011, as the new Smartphones enter inter-operability testing ahead of their planned launches in the first half of 2012.

The chip giant confirmed its next-generation Sandy Bridge-based volume server Romley was already in production for revenues, and would begin volume shipments in fourth quarter.

Intel noted it was seeing 20 times higher demand on Romley (versus previous-generation Westmere) from large and rapidly growing Cloud customers such as Google, Amazon and Facebook.

Intel's chief financial officer Stacey Smith noted the company's third quarter of 2011 business fundamentals were tracking to Intel's guidance for the quarter, with areas of strength in enterprise and emerging market, and some uptick in mature market consumer demand.

We note Intel enters its quiet period at the close of business on Sept. 16, 2011. We believe Intel's Romley update is likely to increase investor confidence in Inphi Corp. and PMC-Sierra Inc.'s product cycles for LR-DIMM and 6Gig SAS (SAS2) respectively, said Mark Lipacis, an analyst at Jefferies.

He said with Intel's third quarter tracking to guidance, momentum building in Ultrabook, Atom-based Smartphone announcements expected in the fourth quarter/first half of 2012, and Cloud demand about 20 times higher for Romley server, the first day of Intel Developer Forum painted a positive picture of the company's fundamentals.

He could become more constructive on Hold-rated Intel with more visibility into Smartphone/Tablet traction. He remains a buyer of Inphi and PMC-Sierra on positive Romley data points.