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Research Firm Thrashes Ultrabook Prices and Marketing

By - Source: IHS | B 28 comments

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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Top Comments
  • 22 Hide
    A Bad Day , October 2, 2012 1:06 AM
    And meanwhile, Apple's ever loyal customers are more than happy to spend significantly over $1000 for non-repairable, non-upgradable lappies...
Other Comments
  • 22 Hide
    A Bad Day , October 2, 2012 1:06 AM
    And meanwhile, Apple's ever loyal customers are more than happy to spend significantly over $1000 for non-repairable, non-upgradable lappies...
  • 9 Hide
    A Bad Day , October 2, 2012 1:07 AM
    EDIT: And what about the Ultrathins? I wonder how will they perform on the market?
  • Display all 28 comments.
  • 3 Hide
    nforce4max , October 2, 2012 1:11 AM
    If they can shrink them down to 11 and 13 inch models they could turn them out in the $300-$600 range which would replace the netops that occupy that price range.
  • 3 Hide
    husker , October 2, 2012 1:23 AM
    “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.
    Really? Someone is going to decide to buy an iPhone 5 to write their research paper, or create those spreadsheets vital to the marketing department at work?
  • 0 Hide
    dalethepcman , October 2, 2012 1:25 AM
    Here is the problem with Ultrabooks.

    Toshiba / Intel laptop. $349
    http://www.newegg.com/Product/Product.aspx?Item=N82E16834214599

    3rd Gen iPad 16GB $510
    http://www.newegg.com/Product/Product.aspx?Item=N82E16858753079

    -or-

    Cheapest ASUS ultrabook $780
    http://www.newegg.com/Product/Product.aspx?Item=N82E16834230466

    That's the lowest price ultrabook model available. If they can make a 15" laptop and sell it for $350-$1000, then how come a 13" laptop costs $800-$2000?
  • 4 Hide
    joytech22 , October 2, 2012 1:29 AM
    Acer has been doing a damn good job at keeping prices low for Ultrabooks.
    You can snag one for $600 AUSD (Which is pretty good).

    Not sure why Ultrabooks are a better choice over laptops though..
    Scored a 15" Acer/w i7 3610QM, GT640M and 4GB of RAM for $1000.

    A comparable ultrabook for that price is more like a 3rd gen i5/w HD4000 graphics and 4GB of RAM with a bad screen.
  • 2 Hide
    Anonymous , October 2, 2012 1:57 AM
    Yes and Intel has made thunderbolt so $$$ for laptop OEM's that most windows laptops still do not offer thunderbolt ports! How many ultrabooks come standard with Thunderbolt ports? Several companies are about to begin offering PCIe docks for more powerful extrenal GPUs to be used with a laptop, but they will require thunderbolt ports! Apple has not had exclusivity for Thunderbolt for how long now?
  • 1 Hide
    Anonymous , October 2, 2012 2:39 AM
    "If they can shrink them down to 11 and 13 inch models they could turn them out in the $300-$600 range which would replace the netops that occupy that price range."

    It's not the size of the screen that's affecting the price so much, it's the solid state hard drives they have (which is why they're so thin). The technology is still pretty nascent, and they have tiny capacity compared with traditional hard-disks.
  • 0 Hide
    Anonymous , October 2, 2012 2:42 AM
    Lots of dumb comments today. Ultrabooks are expensive because they are compact AND powerful. They take sophisticated hardware to run them. It's not just the CPU either. Most of these have anywhere from 13" to 15" ultra thin screens. By definition, they must have a hybrid or SSD drive. Those drives are still expensive. They must be extremely light and tend to have expensive batteries (just due to the form factor). These aren't just ordinary laptops due to the constaints. The problem is, they haven't figured out how to market these additions as necessary. Why should someone pay nearly 1k for an ultrabook when an equally powerful notebook wll sell for $799? Well, that notebook is heavier, will not last as long on battery, may not have the touch interface, and likely doesn't have an SSD for better hard drive performance. They are not selling these facts hard enough.

    As for Thunderbolt, I dont think Intel is making it that expensive. Intel has several variants and one of which is fairly inexpensive. The problem is when the entire system goes for $1k, adding a $30 adapter that has very few available products out for it is probably not a great selling point. Apple creates an entire echosystem so they can do Thunderbolt. The PC world is shared amongst each other though and 1 system costing even a few dollars more than another for some Thunderbolt interface few people believe they need is not a strong selling point. $$$ isn't the entire problem. Intel needs to convince companies to build more Thunderbolt devices an make it an exciting option so vendors can differentiate their products by offering Thunderbolt.

  • 0 Hide
    Solandri , October 2, 2012 2:53 AM
    dalethepcmanIf they can make a 15" laptop and sell it for $350-$1000, then how come a 13" laptop costs $800-$2000?

    Until netbooks, the highly-portable end of the laptop market was always higher priced for fewer features. I tend to carry a lot of gear in my bag (camera, 2 lenses, flash, laptop, accessories) so I've usually paid the premium for the ultralight. It hasn't been cheap. And no, Apple did not invent the category with the Air. My past laptops have included:
    http://www.lenzg.net/portege3440CT/
    http://www.links.net/re/equip/laptop/thinkpad/560.html (4 lbs was featherweight back then)
    http://en.wikipedia.org/wiki/IBM_ThinkPad_Butterfly_keyboard

    So ultrabook pricing is not at all surprising. The people who need/want the extra portability are willing to pay for it. Most of those retailed for over $3000 when they first came out, vs. about $1500-$2000 for the regular 6-8 lb laptop.
  • 3 Hide
    Au_equus , October 2, 2012 3:31 AM
    So what's stopping the likes of asus/acer/toshiba of producing AMD-based ultrabooks or has intel pretty much blocked them out of the market? Not only could they knock $100 off, but they would also add a punch compared to the lame intel igp.
  • 2 Hide
    teh_chem , October 2, 2012 3:59 AM
    This same research company predicted Ultrabook sales to soar in late 2011, to compose 13% of the global computer shipments: http://www.marketwatch.com/story/ultrabook-sales-expected-to-soar-ihs-predicts-2011-11-07 Point being that they're not necessarily wrong, but they've still made wrong predictions in the past.

    The problem with ultrabooks is that generally people don't require them--they're nice-to-have items, but not really a mass-market computer. Anyone who expected them to do well--I mean, compose any significant number of computer shipments--probably didn't understand the market in the first place. They're excellent for mobile people who will pay a premium for that mobility without taking a hit on specs. Otherwise, they're not appealing in any way.

    Here's a thinker--despite poor spec's, people jumped on netbooks when initially released. Why? Because they mostly satisfied most users requirements for a mobile computer, and didn't cost a lot of money. Who is buying laptops, generally? Corporations--and they don't want to pay a premium over standard laptops. And students--who also don't want to pay a premium over standard laptops. I'm not saying they don't have their use, but they're still not a mass-market item. Of course they wouldn't compose a majority of computer shipments.
  • 2 Hide
    assasin32 , October 2, 2012 4:55 AM
    Don't see much use of ultrabooks for myself, I almost picked up a i5 laptop with 6000mah battery (integrated) with dvd burner, 14in screen, etc. And it advertised an 8h battery life and people were getting it and it weight 4-5lb's. I could have easily went into the bios and disabled the ethernet, dvd burner and memory card slot to cut back on power and after wiping the OS of junk or putting in a very low power SSD I bet I could extend the battery life even more. If by some miracle I could get access to the voltage to the CPU which I am not sure of with how locked down things are I would have undervolted it too.
  • 0 Hide
    arlandi , October 2, 2012 5:04 AM
    i dont care about the name. Laptop, Ultrathin, Ultrabook, Portable, whatever. as long as there is a balance between: Price - Weight - Size (Screen/Keyboard) - Hardware Spec. with price as the ultimate factor in deciding which device to buy.
  • 3 Hide
    s3anister , October 2, 2012 5:32 AM
    Quote:
    IHS now expects only 10.3 million Ultrabooks will be shipped in 2012, down from a previous forecast of 22 million units.

    I can't speak for the general public, however, I and those I know will not be purchasing an Ultrabook. No, we're waiting for the Trinity Ultrathins.
  • 0 Hide
    Anonymous , October 2, 2012 6:04 AM
    Trinity ultrathins are already out as Trinity for laptops has been out for a while now. Do you mean Trinity ULV parts? They are out too, just not in high quantity. The reason you and your "others" don't have them is because they are not very good parts. The performance is terrible in both CPU and GPU. AMD is not where Intel is in terms of mobility. They are cheap mobile parts that satisfy a niche market of a niche market. They offer very little over regular AMD Trinity laptops unlike the ultrabook (which at least has a compelling story). There will be no Thunderbolt (unless you think Lightning bolt is anything) on any, few will have SSD's (due to pricing), and most will come with cheapened motherboard parts that will probably send your laptop to the scrap heap earlier than expected. You will save $300, but your system will be nothing more than a thinner, slower, featureless, laptop.
  • 1 Hide
    ojas , October 2, 2012 7:30 AM
    Quote:
    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

    yes the competition for an ultrabook is a phone, an e-reader and an unreleased convertible.
    even though i agree with the fact that prices are too high to be effective, IHS (and Wolfgang's articles) always lose my respect because of statements like these.
  • 1 Hide
    pereks , October 2, 2012 8:10 AM
    I've been waiting to buy an ultrabook for several months now. But only if it comes with Thunderbolt !
    The few out there already are not of interest, like Acers with the stupid motor driven hatch in the back that hides the port. Thunderbolt could bring an unprecedented flexibility ans scalability to mobile computing. Without this, ultrabook is just a lame attempt that has no postion in the market place.
  • 1 Hide
    captainblacko , October 2, 2012 11:19 AM
    ultraGAMINGbook is what i want.

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