Ultrabooks: Four things that will make or break the category

Ultrabooks: Four things that will make or break the category

Summary: If ultrabooks are going to be a huge success they will need to inspire a corporate and consumer upgrade cycle.

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A week from now you may never want to hear the word "ultrabook" again. The Consumer Electronics Show will bring non-stop ultrabook chatter to the fore. And if that's not enough CeBit is likely to be ultrabook heavy too.

You know the ultrabook story by now. Intel has hatched a plan to reinvent the PC with thin, responsive, power sipping laptops. Think the MacBook Air for the Windows crowd. The reviews have been solid and ultrabooks have a lot going for them---notably a thickness of 0.8 inches and some features found in tablets.

What's unclear is how fast this ultrabook transition will occur. For instance, IHS iSuppli reckons that 43 percent of notebook shipments will be ultrabooks in 2015. In 2012, about 13 percent of notebooks will be ultrabooks. Some analysts have noted that the ultrabook could be a big chunk of shipments by the end of the year. Sterne Agee analyst Vijay Rakesh said in a research note.

Intel is making a big push with ultrabooks and working with multiple supply chain partners and Intel Capital to lower platform costs from the current ~$1000+ ASPs to a more palatable ~$800 – with CES-Computex-CeBit as launch venues. We should note prior endeavors such as the CULV and netbook platforms have been successful and so we would not be betting against it. Nonetheless, we believe the 40% ultrabook penetration for C2012 might be too high.

Also see: CNET's CES 2012 coverage

In other words, a lot of folks are clinging to this stat that 40 percent of notebooks will be ultrabooks. What will it take to get there? Here are five items that need to line up for ultrabooks to be a crazy success.

Price. Intel has 60 design wins for next-gen ultrabooks in the queue. That's a good thing given that competition will be needed to lower ultrabook prices. CNET's Brooke Crothers said:

Price may be the single most important metric for ultrabooks. Toshiba has been leading the way this year, going as low as $699 on its Portege Z835. Expect more of this in 2012. HP, for example, doesn't shy away from price competition. Its Folio 13 offers a lot for $899, including a Core i5 processor, a 128GB solid-state drive, USB 3.0, and great battery life.

Is $699 the magic price? Probably not. Perhaps $500 is the benchmark. Tablets and laptops are increasingly looking like competitors not complements. The sooner prices fall, the faster consumers will gobble up ultrabooks.

Windows 8 needs to be huge. The big driver for ultrabook sales will be Windows 8, a Microsoft release designed to meld the PC and tablet experiences. Ultrabooks with touchscreens and hybrids could appeal to the masses. But first, Windows 8 needs to capture corporate and consumer imaginations. The challenge is going to be the new Metro interface, which is snazzy but a total sea change. Ultrabooks have to inspire consumer and corporate upgrades. Will ultrabooks be so snazzy that corporations will hand them out like candy? Probably not at first given that enterprises are still upgrading to Windows 7. On the consumer front, it's also unclear whether ultrabooks can thwart tablet momentum.

The MacBook. No matter how much you love ultrabooks, Apple created the category. Price will matter for ultrabook success largely due to Apple prices. At $800, many folks will go MacBook Air over the ultrabook assuming they can handle an 11-inch screen (I can't) starting at $999. At $1,299 for a 13-inch MacBook Air, an ultrabook at half that price is very appealing. The challenge for ultrabooks is that the PC industry is going where Apple has been---not where it's going. Apple could cut prices, cook up new designs and offer more screen variety to fend off ultrabooks.

Topics: Tablets, Apple, Software, Operating Systems, Mobility, Microsoft, Laptops, Intel, Hardware, Windows

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102 comments
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  • Will users choose Cedar Trail Netbooks over Ultras?

    And will that put price pressure on the Ultra?
    Dietrich T. Schmitz *Your
    • RE: Ultrabooks: Four things that will make or break the category

      @Dietrich T. Schmitz * Your Linux Advocate -
      Again with the "WTF?"
      Wouldn't it be nice if you explained WHAT a "Cedar Trail Netbook" is.
      I'm sure I can Google it, but... seriously? Give a 'clue' when you post something please. Thanks. (I did say "please.")
      digidash
      • RE: Ultrabooks: Four things that will make or break the category

        @digidash I'm planning on purchasing an Ultrabook. But I'm waiting on Windows 8. Does anyone else see a relationship problem with the release of new operating systems and hardware sales?
        STAN113
    • RE: Ultrabooks: Four things that will make or break the category

      @Dietrich T. Schmitz * Your Linux Advocate Doubt it, there is a huge performance difference. We are talking i5s and i7s coupled with technologies that power everything down when idle vs Cedar Trail.
      MeMyselfAndI_z
  • RE: Ultrabooks: Four things that will make or break the category

    "The challenge for ultrabooks is that the PC industry is going where Apple has been???not where it???s going. Apple could cut prices, cook up new designs and offer more screen variety to fend off ultrabooks."

    A decade back shaving sytems had only one blade on it, now most comes with 5 blades... Apple may be bringing something like that... Five 1mm displays that can be pulled up... Mac books will probably be relegated to 1% of market share by 2015.
    owlnet
    • Highly unlikely

      @owlnet Macbook share has only been growing. Apple now almost totally owns the high end laptop market.
      Mac_PC_FenceSitter
      • RE: Ultrabooks: Four things that will make or break the category

        @rbethell if you by high end you mean overpriced, then yes you are correct. I just bought a a $1k laptop. I would need to spend at least $2k to get a similar Apple product.
        Al_nyc
      • RE: Ultrabooks: Four things that will make or break the category

        @rbethell Please cite your source for these numbers. I am interested in reading more about it. Myself, I switched from an HP laptop to a Macbook Pro last February and am very pleased with it. Later this year I plan on upgrading my PC at home, but will be going with a Mac Pro instead of a new PC.
        readydave1
      • Ya, lets get real here.

        @rbethell

        If your talking about laptops that cost huge, and in Apples case undeservedly so, yes, Apple dominates simply due to the fact that all of their competition finds they can mass produce notebooks just as powerful for less money.

        I have said it a million times; if you really need an Apple computer, or simply just really like them for any rational reason and can afford one, go ahead and get one because they make nice hardware and every Mac owner I know seems quite happy with their Mac. On the other hand don't try and justify the purchase of a Mac any flavor by trying to justify its cost or based on claims that Windows is somehow too problematic for daily use.

        The facts of life are the facts of life, Macs are costly and Windows has been powering the computerized world for years without significant issues, so make your purchases with those simple plain realities in mind.
        Cayble
      • RE: Ultrabooks: Four things that will make or break the category

        @readydave1: Here's a comparison for you. Last year, I had to buy a Mac in order to work on some iPad app code. Since writing code on a small screen is less than optimal, I decided on a 15" or 17" MacBook Pro. Since the price differential between the two is < $500, I bit the bullet and bought the 17" MBP (Core i7, 4GB RAM, 500GB 5400rpm HDD). It cost me $3200 inc tax.

        In comparison, I could have bought a Dell Vostro 3750 (Core i7, 4GB RAM, 500GB 7200rpm HDD) for about $1200 inc tax and shipping. In fact, for the money I paid for the MBP, I could have bought two comparable Dell laptops. With enough cash left over for another cheaper laptop or a new printer or a copy of Photoshop, or ...

        Would the Dell have been as "pretty" as the MBP? No, probably not, but at least I'd have the full complement of keys on the keyboard (no delete, page-up/down keys, damn you Apple) and better, more up to date driver support than Apple provides.

        Make no mistake - Apple charges a sizeable premium for its products. How else do you think they report multi-tens-of-billion dollar profits from 40% gross margins on hardware sales while the rest of the PC industry skims by on 4-8% margins?
        bitcrazed
      • Diou! Wrong!

        @rbethell : So as high end laptop are buy by the higher mid range classes of peoples and we see that the fosset between classes are getting bigger... the poor range classe is increasing to the detriment of the mid range classe... Mac book will not grow... It will decrease at the advantage of the less expensive laptops, Windows laptops, which, in any case gives a much better experience to the user any way so...
        EricDeBerg
      • RE: Ultrabooks: Four things that will make or break the category

        @readydave1 : As of January 4, 16:33 EST, Six of the top 10 best-selling computers on Amazon are Apples. http://www.amazon.com/gp/bestsellers/pc/565108/ref=pd_zg_hrsr_pc_1_2_last

        All market studies show Apple's share of the desktop market increasing over the past decade, driven perhaps by iOS sales, but once Apple gets a foot in the door with an iOS device, it's that much easier to make an OS X sale. For 2011 stats, see: http://en.wikipedia.org/wiki/Usage_share_of_operating_systems
        S_Deemer
      • Why so many nerds buy MacBooks

        @rbethell<br>The only reason many nerds buy Macbook Pros is because they need it to develop iOS & OSX apps. If they didn't need a Macbook Pro, they would have done better blowing that money on an Alienware laptop that blows the doors off any Macbook at the same pricepoint.<br>Please realise that a lot of people use a Mac, not because we choose to, but because we HAVE to. If there was an iOS development kit for Windows, there would have been a lot less developers with a glowing apple logo on the back of their screens.
        warboat
      • RE: Ultrabooks: Four things that will make or break the category

        @bitcrazed I call BS on what you claim you paid for your MBP. I bought an identically equipped 15" in June and even with additional items purchased that day it was FAR less than the $3,200 you claim. I wouldn't be surprised if you spent that much with Apple that day but don't lie and claim that was the cost of the MBP with the specs you stated.<br><br>@warboat Sure, there might be fewer geeks with Macs if there was a Windowdevelopmentnt platform but who cares and what difference would it really make since that is such a tiny percentage of the market it's not even worth mentioning. I know it pains you to the core but Mac's market share is growing and no matter what a none Mac user thinks if the actual users are happy with their purchase then in reality they are not over priced otherwise the user wouldn't be happy with the purchase.
        non-biased
    • Right!

      @owlnet
      While the Wintel industry is going after market share with razor thin margin for profit, Apple is laughing all the way to the bank. Who cares about market share when there's not much money in it, and for us techno geeks, when quality stinks in these "ultrabooks"?
      We all know that Apple's competitors are all keeping an eye on them.
      What was it Microsoft used to call Apple? Research south?
      It's making me sad that so few have the brains to do like Apple, powerfully push the evolution of technology forward. :(
      Mikael_z
      • RE: Ultrabooks: Four things that will make or break the category

        @Mikael_z
        Exactly. I always am amazed that more people don't figure this out.

        Apple MAKES MONEY. Most OEMs don't. That's why they're doing so well. They build high quality products, stand behind them and sell them for a profit. Dell, HP and Gateway introduced the cheapo-PC, and consumers assumed that that was how computers should be. Consumers assume that it's normal to buy cheap plastic pieces of crap that break within two years ... they've done it with laptops, desktops, music players and phones for decades now. Part of what I admire about Apple (I won't say 'love', since I'm quite turned off by a lot of Apple aspects as well) is that SJ was unwilling to cheapen his own product with discounts, flash-sales and multiple models. Apple makes a few very great products, supports them for many years, and prices them accordingly.

        BTW, this is also why the Thinkpad is so great. The Thinkpad has evolved slowly over its lifetime (from IBM to LN). It's not the trendiest or most attractive computer, but boy, Thinkpads LAST. And they work.
        lapland_lapin
      • RE: Ultrabooks: Four things that will make or break the category

        @lapland_lapi
        Don't let apple fool you. they're using the same components everyone else is. Dell laptops and Apple laptops are all made by Foxconn.
        curtis@...
      • Of course you don't get it. Clearly.

        @lapland_lapin<br><br>You say:<br>"Exactly. I always am amazed that more people don't figure this out.<br>Apple MAKES MONEY. Most OEMs don't"<br><br>This is a truly bizarre comeback. <br><br>Your comment clearly implies that for the majority of consumers its somehow of some importance to them how a company makes its money. As in, "Apple makes more profit per unit but sells only a small fraction of the units OEM's sell and thats better then the OEM's method of selling way more units at razor thin profit margins because their prices are lower". Sorry, but the pubic largely will like the narrow profit margine idea much better given it means significantly lower prices.<br><br>Your commentary about plastic pieces of crap only carries so far. I work at a business where numerous laptops are in use, both Apple and Windows based and there are quite a number of Windows laptops in use well over 2 years old. Most laptops of any make that I see replaced are almost always replaced due to the hardware just getting to old, not because some "cheap plastic part" broke. <br><br>Reality is that if someone is going to rely on their laptop still being in good shape and reasonably up to performance standards for, lets say 5 years for example, its going to still be a tough sell for Apple laptops, even if you simply flat out believe with the strongest of convictions that they routinely outlast Windows laptops.<br><br>For example, you can get a Samsung 17.3" with a 2.0 i7 quad, 8 gig of ram and a 1.5 TBHD and graphics with 2GB of dedicated memory for $999.00. This compares quite favorably hardware wise to the 15" Macbook Pro with a 2.2 i7 with a 500GB HD, 4GB of memory and graphics with 500MB of dedicated memory priced at $1849.00. The only place the Macbook beats the Samsung is by a slight margin on the CPU, other then that there is nothing particularly inspiring about the Macbook hardware. The problem is, if you need to replace the Samsung in three years you could easily do it, getting what would probably be an even better machine for less money in three years, with minimal work you could no doubt come in at a price for the new one that would still bring the combined total for the two Windows based laptops still slightly under the $1849 price tag for the one single Mac. And of course in year three, the Windows user has themselves a nice brand new snappy laptop likely much much better then the Mac purchaser who is going to continue to ride it out for another couple years to prove how great it is that you can make a Mac last longer then a Windows based laptop.<br><br>Again, if you really like Macs for any good reason, or maybe you actually need a Mac as opposed to a Windows machine, if you can afford it, get it because everyone I know that uses one really likes them. But don't ever try and justify the purchase based on some kind of cost analysis that somehow works in Apples favor. The math just isn't there. It requires far too much wishful thinking to make that kind of justification.
        Cayble
      • RE: Ultrabooks: Four things that will make or break the category

        @curtis@... Regarding Apple uses the same components as other PC OEMs.

        Well, Apple doesn't use the same trackpads. (See James Kendrick's recent articles on the subject.)

        Apple doesn't use the same battery technology. (Although a difference which makes no difference IS no difference. By that I mean, that might not matter in a comparison between an Apple Battery subsystem vs a PC battery subsystem if the two give equal charge durations and have the same service life. Although, I tend to think Apple's new battery tech might last longer and perform better overtime than a comparable PC system. But again, I have no experience to support that claim.)

        Most PC laptops are not constructed using a aluminum unibody case. Apple unibody laptops are noted for their lightweight and case rigidity.

        But do they use the same processors? Yeah. The same RAM? Yeah. Although Apple does tend to use more SSD Flash based memory than a PC laptop does, on average.
        kenosha77a
      • RE: Ultrabooks: Four things that will make or break the category

        @@ Cayble... Seriously dude? I am using an early 2008 black macbook that still can perform with most new high end Windows computers. My black macbook is 2.0 with 2gb ram. Oh and the best part is when new it was $999. I bought it in 2010 for 630 on ebay and today I can still get 400 on ebay? so lets see who is loosing more money here? Me running the newest apple operating system on a 4 year laptop or you replacing your PC every two years because it cannot suppor the newest version of ram hogging windows.
        crtvance