Ultrabook holds on to growth despite competition

Ultrabook holds on to growth despite competition

Summary: As prices drop and functionalities and performances improve over the coming year, demand for ultrabooks will climb even with competition from tablets and hybrid devices.

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TOPICS: PCs, Mobility, Tablets
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The future of ultrabooks remains rosy despite increasing competition from tablets and the entry of new hybrid form factors, especially with the launch of Microsoft's Windows 8-powered devices later this year, and a general lack of understanding among customers of what the device brings to the table.

Industry analysts say consumer awareness and demand would naturally grow once the prices of ultrabooks drop and hardware features and performance improve.

Currently, there is not a great deal of support for ultrabooks among consumers because people cannot understand the value of these devices over that of the traditional notebook, said Tim Coulling, an analyst for the client PC market at Canalys.

This is one of the main reasons why demand for ultrabooks has not been great, and 2012 shipment will fail to match optimism and projections laid out at the start of the year by vendors and analysts, Coulling told ZDNet Asia in a phone interview.

Market intelligence firm IHS Suppli, for one, stated at the start of October it would be cutting its forecast on ultrabook shipments. It previously predicted 22 million units of the device would ship by end-2012, but revised this down to just 10.3 million worldwide.

Explaining the dampened forecast, Craig Stice, senior principal analyst for compute platforms at IHS, said the PC industry so far has failed to create the kind of buzz and excitement among consumers which is required to propel ultrabooks into the mainstream.

This especially is proving a problem amid the hype surrounding tablets and smartphones, Stice added.

Combined with other factors, including prohibitively high pricing, this means ultrabook sales will not meet expectations in 2012, he said.

Tracy Tsai, research director at Gartner, also pointed to the high price point as a reason for the lack of consumer demand.

Since the price of ultrabooks is higher than mainstream notebooks, it would be difficult to move this device segment in large shipment volumes especially amid a weak global economy, Tsai noted.

Another factor is the screen-size of ultrabooks, which is typically 13-inch or less.

The Gartner analyst said in key markets such as North America, Europe, Japan and China, the preferred screen-size among consumers is between 14 and 15 inches.

"As consumers prefer large screens for content consumption at home, the smaller [ultrabook] screen is nice for portability but not [optimal] for long-time content consumption," she said.

Not one-size-fits-all
Coulling also pointed out the success of Windows 8-powered tablets and hybrid devices would have an impact on future ultrabook sales "to a certain extent".

The Canalys analyst said the hybrid form factor, referring to tablet devices which convert into a laptop when docked with a keyboard and mouse, will be the "sweet spot" for Windows 8 as users can get the best features from both form factors.

For such hybrid devices to take off, though, the developer community would have to jump onboard Microsoft's new operating system and develop enough apps to satisfy user demand, he said.

Asked if cutting the price of ultrabooks would help boost its appeal when compared with other portable computing devices, Coulling replied in the affirmative.

He acknowledged the ultrabook was developed to compete at the top end of the notebook market, and consumers needed to recognize the value of the device's features such as instant-on and long battery life.

However, ultrabook prices currently range between US$800 and less than US$1,000 are considered pricey when compared with notebooks, which typically costs US$500 to US$799.

As such, he recommends vendors work toward the US$699 price point to spark wider consumer demand.

Jeff Morris, director of end-user computing at Dell Asia-Pacific and Japan, also said the various device form factors in the market currently cater to different user needs, and one size does not fit all.

For some consumers, a tablet is a companion device for their PCs, and they use the former only to consume content but work mainly on the latter.

Business users, on the other hand, would appreciate ultrabooks for the presence of a keyboard and the enterprise-level security and manageability capabilities provided by PC makers such as Dell, Morris explained.

Ultimately, Coulling believes ultrabooks will continue to have a role to play in the overall PC industry.

However, the early optimism and high sales and shipment figures projected for this device segment will have to be tampered down due to increased competition and macroeconomic uncertainties, he added.

Topics: PCs, Mobility, Tablets

Kevin Kwang

About Kevin Kwang

A Singapore-based freelance IT writer, Kevin made the move from custom publishing focusing on travel and lifestyle to the ever-changing, jargon-filled world of IT and biz tech reporting, and considered this somewhat a leap of faith. Since then, he has covered a myriad of beats including security, mobile communications, and cloud computing.

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2 comments
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  • Windows 8 will blur the line

    Today it is pretty clear what an ultrabook is and what a tablet is. But six months from now Windows 8 will have blurred the line considerably. Is the Surface RT a tablet or an ultrabook? What about the (future) Surface Pro? I find it very interesting that Microsoft is in the middle of a new form factor change.
    aneveu
  • Dont believe a word of it. We get the value vs traditional notebooks and

    laptops. Were not confused or distracted by tablets and were not put off by 13" screens. It's price and price only. There should be no more non ultrabook laptops, notebooks, netbooks, etc. When the ultrabooks hit the $499-$599 price points of the current laptops they are internal component spec competitive with they will fly off the shelves. Just because you finally got around to making the product you should have been making for the last 3 years doesnt mean were going to let you rip us off. You get the same margins youve been getting and be happy or you watch them collect dust.
    Johnny Vegas