Would a $799 MacBook Air crush ultrabook market?

Apple may begin selling a more affordable version of its entry-level notebook in order to compete with upcoming ultra-thin Windows 8 laptops.

By TheWeek.com May 8, 2012 3:04PM

Apple logo copyright Beck Diefenbach/ReutersApple's (AAPL) gorgeous, high-end consumer gadgets have developed a rabid following, and if recent earnings are any indication, the company's reluctance to offer consumers affordably priced options has paid off handsomely.

So, counterintuitively, a new report from technology news site Digitimes claims that the company is on the verge of releasing a $799 MacBook Air, citing anonymous sources in Apple's "upstream supply chain." That's $200 cheaper than the company's current entry-level portable, and could effectively eliminate the cost advantage of "ultrabooks" -- lighter, thinner laptops made by rivals like ASUS (AKCPF), Intel (INTC), and Sony (SNE).

Would ultrabooks stand a chance if the MacBook Air slashed its price?

This would be a huge blow to ultrabooks: Ultrabook sales are already underwhelming, says Matt Peckham at TIME, partly because of the proliferation of tablets like the iPad. Plus, smart consumers may be waiting for the fall release of Microsoft (MSFT) Windows 8 before jumping aboard the ultrabook bandwagon. But if Apple gets the jump and releases a $799 MacBook Air with a battery-saving Ivy Bridge processor? "All bets are off." (Microsoft owns and publishes Top Stocks, an MSN Money site.)

But the rumor is probably bogus: "The Macbook Air has been selling just fine" without a big discount, and currently accounts for 25% of Apple's total notebook sales, says Max Eddy at Geekosystem. Why would the company stoop down to the competition's level? "Apple does not bow to trends -- it makes them." Remember: Apple rolled out the iPod when the industry was just starting to embrace CD burners, and unveiled the touchscreen iPhone while RIM's (RIMM) BlackBerry was still king. A competitively priced MacBook Air seems unlikely.

Actually, it sounds quite plausible: Remember when Apple unveiled the iPhone 3GS? asks Erica Ogg at GigaOm. The company still offered the older iPhone 3G at a discounted price of $99 (as opposed to $199). Apple did the same with the most recent iPad. So if Tim Cook and Co. do decide to sell a MacBook Air at $799, count on it being last year's model with a nice discount.

More from The Week

May 10, 2012 10:19AM
Apple should get aggressive while they have the momentum. It's not good waiting for ultrabooks to start eating the MBA's lunch. As long as they don't compromise on quality, a $799 MBA would be very welcomed.
May 9, 2012 1:03AM

Smile Apple should bring it on. An $880 MacBook, a $700 W8 ultrabook with touch screen that is a tablet and an $400 W8 tablet that can have a $100 dock and keyboard. It's going to get really good for anybody that wants a new toy next Christmas.

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