Intel seems to have the right idea on saving the PC industry. They are pushing Ultrabooks to the $599 price point with mandatory touch capability by the end of 2013.

This shows that Intel is serious about making touch a mainstream option in PCs. Multitouch sensors are essentially a $40 component that was traditionally sold as a $400 premium feature in higher end notebooks, but only a tiny percent of PCs to date have shipped with touch screens. By making it mandatory across the board, the retail price markup is brought closer in line with the actual cost of the component. With features like touch and always-on capability in the fourth generation ultrabook, and an attractive $599 price point, the PC is far less likely to cede market share to tablets.

Last week I pointed out the failed launch of Windows 8 tablets and it looks like Vizio is following in the same footsteps with their 11.6" AMD Z-60 based Windows 8 tablet. The AMD Z-60 has low CPU performance and lacks always-on and it's too heavy at 1.8 pounds. The Samsung 11.6" ATIV 500T tablet by comparison weighs 1.4 pounds. The reason for this is that the AMD processor requires a much larger battery.

Samsung's 11.6" tablet is much lighter because Intel's Clover Trail "Atom" processor has always-on capability and is far more energy efficient. There are heavier Intel based tablets based on Intel's Ivy Bridge "Core" processor which also lack always-on and battery efficiency, but Ivy Bridge was designed for higher end notebooks or "Ultrabooks" with its much faster CPU and relatively fast GPU.

Still, all of these Windows tablets aren't close to being competitive with Apple's iPad 4 or Samsung's Nexus 10. Very few people will pay $800 for an atom based system or low end AMD performance. The PC industry used to taunt Apple about their price premium but now the joke is on them.

It's crucial that the PC industry hits the strategic $399, $499, $599, and $699 starting price points. $399 starting price for an Atom based system with a standard 1366x768 display would be price competitive. $699 starting price for a Haswell based system and a retina class display would be competitive. The PC industry also needs to forget about 1080P displays because it makes the icons and text in Windows 8 too small. They need to match the MacBook pro with Retina display so that pixel doubling can be employed. That means 2560x1600 emulating 1280x800 so that icons and other GUI elements that have not been optimized for a 2560x1600 display still look decent and remain the same size.

Some people will say I'm expecting too much for $699 but the Nexus 10 offers 2560x1600 resolution at the $399 price point. This is what consumers have come to expect and this is the new marketplace reality. Companies can always sell higher end versions with higher clocked processors, more storage, and more RAM at higher price points but they must have a good starting price that's competitive with iPad and Android.

Intel just announced at CES a more energy efficient Ivy Bridge chip with 7 watt TDP (Thermal Design Power) and a faster Atom processor. But what I'm really waiting for is Intel Haswell due later this year. Haswell offers high end performance of an Ultrabook and the always-on battery life and light weight form factor of a tablet. Intel also announced the Bay Trail "Atom" processor which is a 22nm quad-core chip succeeding the 32nm dual-core Clover Trail processor. Bay Trail will have twice the CPU performance of Clover Trail and it will further improve battery life. Bay Trail will also get a significant GPU upgrade because it will use the same graphics technology as Intel's Ivy Bridge processor used in high end notebooks, though Bay Trail will only have 4 execution units compared to 16 in Ivy Bridge.

Intel also appears to be hedging its bet on Android in case Windows tablets continues to disappoint. Unlike Clover Trail which only worked on Windows 8, Bay Bridge will also work on Android. This opens the possibility of an Intel Atom processor in some future main stream tablet like the Nexus 10 and maybe a Haswell chip in a high end tablet. Asus has already leaked out a low end 7" $199 tablet with a 1280x800 IPS display running on the Atom Z2420 processor.