A new rumor has surfaced, courtesy of DigiTimes, about a possible $799 Apple MacBook Air. If true, this move by Apple could be due to the onslaught of cheap Windows based Ultrabooks set to attack the market later in the year.

Competing with the Ultrabooks would be Apple's own little 11.1-inch and 13-inch MacBook Air models. Unfortunately, for Apple, these devices are too expensive. Prices range from $999 to $1299 respectively, a far cry from what Intel is planning with its new range of Ultrabooks. We have seen some cheap Ultrabooks from the likes of Acer and others and things didn't go too well when it came to battery life and incredibly slow hard drive. So what could Apple offer at $799 that won't stink?

Many of you reading might be expecting an all new MacBook Air from Apple, but that might not be the case here if you really dig in and think about it. What Apple could do is drop the price of the $999 MacBook Air and release a new version to replace it; the company did the same thing with the iPad 2. Release the new iPad, and drop the price of the iPad 2. It's a no brainer instead of coming out with an all new product.

The $999 MacBook Air features an 11.1-inch display and 64GB of SSD storage, such a device would work wonders at the $799 price point, while putting on a world of pain on Intel's Ultrabooks plan. For this to happen, it would all come down to how much the cost of parts have fallen and how much Apple is willing to cash in.

Last year, Intel started a $300 million fund to help Ultrabook manufactuers enhance the lightweight laptops and the softwares that runs on them. We will see how much of a help it will be if Apple jumped the gun and really does drop the price of its $999 MacBook to $799 later in the year.

(reported by Vamien McKalin, edited by Dave Clark)