The World's Thinnest Notebook

If it catches on, Intel's sleek laptop could be a game changer for PCs

By Olga Kharif

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When Intel asked designers to build a better laptop, its instructions were simple, really. The machine has to be fashionable, able to connect to all manner of wireless networks, and full of the latest, fastest computing capabilities. Oh yes, and make it as thin as Motorola's Razr. Its own engineers in conjunction with Ziba Design in Portland, Ore., rose to the challenge.

The result, code-named Intel mobile Metro notebook, is less than 0.7 inches thick—about one-quarter of an inch thicker than Motorola's (MOT) iconic cell phone, making it the world's thinnest notebook. And at 2.25 pounds, it's also one of the lightest small-sized portable computers. Other features include always-on Internet connectivity via various wireless technologies.

And unlike other computer prototypes, including some from Intel, this one actually may line the shelves of a retailer before long. Intel hasn't announced an official release date but people familiar with the matter say a PC maker will announce plans to start manufacturing the machine later this year.

Thin Notebooks, Fat Margins

The laptop—the only notebook design expected to come out of Intel (INTC) this year—was first showcased at an Intel Developer Forum in Beijing in April, but designers gave BusinessWeek.com an exclusive, up-close look at the technology and ideas behind the project. If manufactured and sold on a wide scale, the creation could have a lasting impact on computer design, use, and marketing.

That, in turn, would be good news for chipmaking colossus Intel, which has seen sales slump amid a price war with archrival Advanced Micro Devices (AMD). Plus, it's keen to rev up demand for the computers running on its processors. The device might rely on Intel chips not just for computing but also for memory and connecting to wireless networks. The prototype also incorporates technologies developed by companies financed by Intel Capital, the chipmaker's venture capital arm.

Intel would especially like to see higher sales of portable computers, particularly fatter-margin devices at the high end of the market. Sales of laptops priced at $2,000 and above are rising 1.4% a year, compared with 73.5% for notebooks priced $500 to $999, according to researcher IDC (IDC). That's in part because sales of PCs to corporations, often the biggest buyers of high-end laptops, are slowing.

"Like Jewelry"

Consumers, as a result, are a big driver for sales. And more than ever, consumer-buying choices are influenced not just by function, but form. At the same time, many PC makers have given short shrift to design in hopes of keeping costs at a minimum.

That's where Intel, with Ziba, hope to make their mark. "Intel wants to stimulate the conversation," says Roger Kay, president of consultancy Endpoint Technologies Associates. Besides making the machine thin, they're also using materials aimed to communicate high quality and coolness. Made of champagne-colored magnesium, the laptop is decorated with subtle gold accents.