According to a new report by Digitimes, Acer is working on a new 15 inch ultrabook, which will be priced at around $699. Taiwan based Pegatron Technoloy will manufacture the new budget ultrabook for Acer.

Ultrabooks are slim, light, yet powerful notebooks which offer much greater battery life than traditional notebooks. They are modeled after the Apple Macbook Air, and come with SSD storage and no optical drive.

Recently, there has been a relative slowdown in notebook shipments due to the growing popularity of tablets. Intel is spearheading the ultrabook effort partly to make notebooks cool again, and also because of the resounding success of the Macbook Air.

Acer, Asus and Toshiba recently launched their ultrabooks, but almost all of them have been priced higher than $1000, which is much higher than the average notebook.

Intel is reportedly offering a marketing subsidy to each ultrabook manufacturer to bring ultrabook prices down to $600 and spur sales.

With the launch of Windows 8 in 2012, ultrabooks could see a surge in sales. Rumors suggest that all major notebook manufacturers are working on touchscreen ultrabooks, which could act as a tablet, and would be perfectly suited for Windows 8 with the Metro UI.

If Acer is able to launch a $699 ultrabook soon, it could get a significant headstart over its competitors, unless they are working on budget ultrabooks too. In any case, the customer wins.