Intel Corp.'s plan for a new ultra-thin, power-efficient laptop is the chip giant's bid to outshine Apple Inc.'s iPad and tablets based on ARM Holdings PLC's technology, analysts say.
Intel Executive Vice President Sean Maloney received the first version of the ultrabook during his Computex presentation from Asus Chairman Jonney Shih.
"Transforming the PC into an ultra-thin, ultra-responsive device will change the way people interact with PCs," Shih said.
Intel also touted more than 10 new tablets based on its technology, but analysts say the ultrabook underscores that Intel will continue to focus on traditional personal computers. Read more about Intel's plans for 'ultrabook' laptops .
"This is their big shot," analyst Rob Enderle of the Enderle Group said. "The idea is to showcase a product that is within the size and weight envelope of the iPad, but has the performance of a laptop. Their goal is to get people to start thinking of products like the iPad as crippled and, if they can do that, they can finally move effectively against ARM on tablets."
A premise of Intel's move appears to be the evolving tastes of users.
"There are millions of users who are still quite keyboard centric and are not ready to walk away from the use of a laptop in their lives," analyst Tim Bajarin of Creative Strategies Inc. said.
"However, they are also reluctant to carry another device like a tablet with them, which only adds to the amount of devices they have in their digital lifestyles," he added. "I think that these convertibles, if they are really thin and light, will strike a chord with this type of user and could be the type of device they choose to use instead buying two different devices."
Intel has struggled to compete with mobile computing devices, including tablets, based on designs by ARM Holdings (ARMHF),
In the mobile computing arena, that trade-off has so far benefitted ARM, which also enjoys the advantage of being the entrenched incumbent in the market for smartphones and tablets.
But analysts see Intel using its manufacturing technology edge to come up with more power-efficient chips, while maintaining its lead when it comes to computing performance.
In fact, even ARM concedes that Intel will likely eventually catch up.
"They'll get to a point where they'll match us on power," Bob Morris, ARM's director of mobile computing said in an interview last month. But he also argued that there are so many players in the mobile space that Intel could never be as dominant as it has been in PCs.
ARM does not make chips, but licenses its technology to other semiconductor companies.
Intel is an engineering and manufacturing powerhouse, systematically launching new products based on Moore's Law. That's the chip industry trend named after Intel co-founder Gordon Moore in which the number of transistors that can go on an integrated circuit has roughly doubled every two years.
This has allowed chip companies, led by Intel, to make smaller, more powerful and less expensive processors, especially in the PC market.
Intel has stressed that it is mapping its product road map with a heavier emphasis on more power efficiency.
"Intel has a convincing story in its low-power road map," said Roger Kay of Endpoint Technologies Associates. Eventually, he added, "Intel's chips will likely outdo ARM's substantially on both performance and power measures."
Still, he argued, Intel may have to do more than match or even outdo the performance of ARM-based chips.
"It may take that kind of clear beat to convince ARM customers to switch," he said. "The existing ARM ecosystem has a lot of inertia holding it in place."
Morris of ARM echoed this view, predicting that "when Intel becomes competitive in low-power, they're going to be one of many. They'll have to compete with Samsung, with Qualcomm, with Nvidia, with Broadcom."
Kay also cited the thousands of application developers "who are comfortable working in the ARM environment. Intel will have to offer a lot beyond par to unseat the incumbents."
Which is why Intel is making a big push to weaken the appeal of ARM and the current crop of tablets, analysts say.
"Intel will position new atom offerings as the 'best of all worlds" taking a swipe at the compromises you have to make with ARM," IDC analyst Crawford Del Prete said.
"From the progress Apple has made over the last few years with iPad, it's a compelling argument that the 'lean back' experience of media tablets requires different performance characteristics more about battery life and media consumption which except for flash, ARM is doing pretty well," he added.
Referring to new tablet-like laptop category Intel is pushing, Del Prete added: "I will be surprised if it can offer the power profile of an ARM- based tablet, but it can offer excellent performance."
To be sure, Intel will try to offer both an "excellent traditional computing experience" and the benefits of tablets, he added.
But it's a tricky approach.
"So far the 'both' approach has not worked," Del Prete added.
Enderle sees Intel ultimately trying to de-mystify the king of tablets, the iPad from Apple (AAPL)
It sets up what could be a fascinating rivalry, he argued.
"Intel is hard to bet against Apple," Enderle said. "But, in this case, they are rolling against Apple and Apple takes no prisoners either. It should make for an interesting battle and Intel's future hangs on the outcome."
Benjamin Pimentel is a MarketWatch reporter based in San Francisco.