Ultrabooks are only 5 percent of laptop sales. High prices still to blame?

With many Ultrabooks continuing to hover near the $1,000 price point, the PC industry shouldn't expect big sales until prices are slashed.
Written by Sean Portnoy, Contributor
At $1,399.99, the upcoming HP Spectre XT TouchSmart continues the trend of pricey Ultrabooks.

The future of laptops, as Intel has intended with its Ultrabook platform, is reaching consumers a little slower than the PC industry may have expected. According to market research from Barclays, Ultrabooks only accounted for around 5 percent of laptop sales in the second quarter of 2012.

That's about half the sales percentage that PC manufacturers expected, which has market analysts trying to determine the reasons for the slower-than-anticipated sales. No doubt the success of tablets and the anticipation for Windows 8 have played a part, but pricing still appears to be culprit number one.

Sterne Agee analyst Vijay Rakesh told AllThingsD that 75 percent of Ultrabooks being sold at Best Buy cost $950 or more. Despite the hype over new hybrid tablet/Ultrabook models running Windows 8 announced at IFA 2012 last week, there was precious little information provided about their pricing. Given their advanced functionality, these devices will probably continue to toe the $1,000 price line, if not leap right over it.

There are some Ultrabooks that are priced closer to $700, but considering how many people don't want to spend more than $500 for a new laptop, there is still plenty of room to cut costs. Intel is working hard to help manufacturers slice component costs -- such as devising cheaper, yet still rigid plastic chassis to replace pricier metal chassis -- and they already use hybrid SSD/hard drive storage in lieu of pure SSD solutions to shave costs off lower-priced Ultrabooks.

But there's one component Intel doesn't seem as interested in seeing come in with a lower price: its own processors used to power Ultrabooks. Businessweek says the Intel processor accounts for around 25 percent of the total cost of an Ultrabook, and there's no indication that the company is willing to cut that cost for its manufacturing partners.

As more Ultrabooks hit the market, part production will ramp up, prices will eventually fall, and sales will increase. Unfortunately for the PC industry, that process hasn't happened soon enough. Do you still think Ultrabooks are priced too high? How low must prices go for you to consider purchasing one? Let us know in the Talkback section below.

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