Consumer excitement for the slim, portable laptops is high, according to CEO Paul Otellini.



NEW YORK (TheStreet) -- Intel(:INTC) is betting aggressively on Ultrabooks as the chipmaker looks to play catch-up with Apple(:AAPL) and make inroads into the tablet category.

While Intel powers 80% of the world's PCs, worries that the iPad and other high-end tables could erode the PC sector have pushed the chipmaker into a new direction.

The company is doubling down on Ultrabooks -- thin, light and power-efficient laptops that are a far cry from bulky PCs and closer to trendy tablets. The category is expected to grow to 40% of the consumer laptop market by the end of the year, Intel CEO Paul Otellini said during an earnings call with analysts.



"I have not seen this level of excitement in our customer base since before 2003 with Centrino," Otellini said, referring to the marketing campaign for laptops with wireless connectivity.

Otellini expects more than 70 Ultrabooks to launch by the end of the year from manufacturers like Lenovo, Toshiba and Acer.

To promote consumer awareness for the products, Intel is investing aggressively.

Its marketing campaign is expected to surpass the $300 million on Centrino, according to reports and its Intel Capital venture capital arm has made an additional $300 million pledge to companies looking to drive innovation in the sector.

Intel also hopes this push will lower the average cost of Ultrabooks to around $699, down from their current price of over $900.

Analysts are bullish about the ability of Ultrabooks to drive growth not only for Intel, but for the entire PC sector.

"They're one of the multiple growth-drivers for the company, and it'll define the growth of the PC market," said Hendi Susanto, an analyst with Gabelli. He expects Ultrabooks to increase from 29 million units this year to 156 million units in 2015.

Ultrabooks could also trigger a new PC upgrade cycle, said Morningstar analyst Andy Ng. While there's some concern that Ultrabooks could cannibalize PC sales, this may be positive, he added, as the devices have higher average selling prices than traditional laptops do.

Others are more cautious about Intel's prospects.

"Ultrabooks are a nice way of revising the notebooks, but I don't know if they'll will be a significant driver," said Hans Mosesmann, an analyst with Raymond James. "It's not going to stop the adoption of tablets and iPads from happening."

Shares of Intel were rising 1.8% to $26.10 in late-morning trading on Friday.

-- Written by Olivia Oran in New York



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