Research Firm Thrashes Ultrabook Prices and Marketing

The Ultrabook is praised as the savior for the PC industry in 2012, and is the flagship product for the launch of Windows 8.

However, market researchers believe that Ultrabooks will fall short of their opportunity, largely due to the fact that prices remain high and marketing has failed to create interest in the category.

IHS now expects only 10.3 million Ultrabooks will be shipped in 2012, down from a previous forecast of 22 million units. The 2013 forecast was also cut from 61 million to 44 million units. To succeed, IHS said that Ultrabooks need to become available in the $600 price range and drop down from their current lofty $1,000 neighborhood. For 2013, the market research firm says that a $600 touchscreen Ultrabook with Windows 8 will be a requirement. If prices remain high, sales "will continue to struggle".

“With the economy languishing, ultrabook sellers may have trouble finding buyers at the current pricing, especially with fierce competition from new mobile computing gadgets such as the iPhone 5, Kindle Fire HD and forthcoming Microsoft Surface,” said Craig Stice, senior principal analyst for compute platforms at IHS.

While there has been consistent news from Intel as well as system vendors that prices will come down, Ultrabook retail prices are relatively stable at around $1,000 today. What we are seeing is a blame game, in which one side accuses the other of greed and a complaint of lack of innovation goes in the other - while the industry is attempting to maintain a positive tone prior to the launch of Windows 8. However, there is mounting criticism that is zeroing on marketing as well as Intel's tight grip on the Ultrabook definition.

"Another factor causing IHS to reduce the forecast is Intel’s increasingly stringent set of definitions for ultrabooks," the market research firm said. "Based on these designations, many notebooks once called ultrabooks now are being classified as ultrathins."

On the vendor side, IHS argues that there is simply no differentiation among Ultrabooks, which is met by a lack of marketing that has not created interest in the category among consumers. The firm went as far as describing current marketing campaigns as "nebulous".

“So far, the PC industry has failed to create the kind of buzz and excitement among consumers that is required to propel ultrabooks into the mainstream," Stice said. "This is especially a problem amid all the hype surrounding media tablets and smartphones. When combined with other factors, including prohibitively high pricing, this means that ultrabook sales will not meet expectations in 2012."

Still, IHS believes the opportunity is there. The firm projects 95 million Ultrabooks to be sold in 2016.

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