Following in the wake of build to order (BTO) notebook programs such as Rich Creek 2 and Verified by Intel that were launched with fanfare but never caught fire with the marketplace, Intel Corp. (NASDAQ: INTC) hopes it finally has the answer for the BTO notebook market with Spring Peak.
The Spring Peak line of BTO notebooks will focus on the notebook arena and will include two models, a 13.3” ultrathin and a 15.6” standard notebook, as well as a docking station. Original Device Manufacturers (ODMs) in Asia such as GigaByte Technology Co. Ltd. have been tapped and it will be brought to market in North America by specialty distributors such as ASI as a channel-ready, bare bones notebook.
Bill Davidson, mobile marketing manager for Intel, said Spring Peak allows the channel to compete on price in ways that were difficult in the past, particularly in the competitive and margin-conscious notebook space. He doesn’t see Spring Peak stacking-up against cheap retail product, but rather sees it playing as a lower-cost option to business class notebooks from the brand-name vendors in targeted business segments.
He added Intel has learned lessons from its past BTO iterations, such as RC2, and is committed to giving the channel the tools and the support to find success with Spring Peak.
“Spring Peak doesn’t solve world hunger, but it does address a number of things we’ve learned over the years,” said Davidson.
That includes the inclusion of a docking station, which was planned for RC2 but never got off the ground. As well, rather than trying to bring an ecosystem of products to market as was done with RC2, which sought to leverage components from many suppliers, Spring Peak will ensure volume by working with select Asian suppliers and North American distributors.
“We’re working closely with our ODMs and our local OEMs to ensure the supply of spare parts is happening,” said Davidson.
Available now is the 13.3” notebook, a lightweight ultrathin that, by moving the optical drive to the docking station, weighs just 1.6kg and uses ultralow voltage (ULV) technology. Based on the Intel Core 2 Duo line, the notebook features a stylish dimpled texture. The 15.5” notebook will launch in late March based on Intel’s new 2010 Core processors, with similar design to the 13.3” notebook but with a full keyboard including numeric keypad. Finally, the docking station will launch March 1st, offering a variety of port and optical drive options.
Davidson said Intel is targeting the SMB and education segments with Spring Peak, and in addition of margins of over 10 per cent, partners can realize added value through services and accessory upsell as well as by branding the offerings under their own names.
While Intel is hoping it has found its BTO niche with Spring Peak, the market opportunity may be limited according to Tim Brunt, senior analyst, personal computing with IDC Canada. There’s still a white box opportunity with PCs for highly specialized and configured machines for testing purposes, a market too niche for the major vendors to target, but otherwise, Brunt said the white box market has shunk dramatically in recent years.
“It’s going to be difficult for them,” said Brunt. “A lot of the commercial SMB business has shifted from dealing with VARs and now more SMBs are buying through big-box retail.”
The view is more optimistic at Markham, Ont.-based ASI Canada. Newman Ho, sales manager with ASI Canada, said Spring Peak continues Intel’s long-term commitment to the BTO notebook market and gives resellers a competitive offering to take to key target segments in the SMB and education markets.
“There’s still a good market out there,” said Ho. “It’s not going to be like the retail channel with lots of volume, but it’s still a very good product the reseller channel can embrace.”
Ho added he also believes Intel has learned some lessons from its previous programs, such as RC2.
“I think Intel may have used a consolidator (with RC2) that didn’t really understand the ins and outs of a BTO notebook program,” said Ho. “This time they’ve selected ASI as a North American consolidator, and I think this is the right step, to work with a company that has done BTO with Intel for eight years. Logistics and service-wise, it will be an improvement over RC2 for sure.”
Ho said another key differentiator is that while RC2 was an industry-wide play, Spring Peak is focused on key target market verticals. He adds the ability for the reseller to brand the notebooks themselves is also key.
“A notebook is a notebook today; but with the branding the reseller can really get in front of their customers,” said Ho. “This will help the reseller to get the customer to remember them. Six months down the road they could forget who sold them that HP notebook, but they’ll see the reseller logo on the branded notebook.”