Ultrabook shipments disappointing, IHS says

Press release; Jessie Shen, DIGITIMES [Tuesday 2 October 2012]

Amid high pricing and a lack of effective marketing to draw consumer's attention away from other hot-selling mobile gadgets, global ultrabook shipments are falling short of expectations in 2012, prompting IHS to cut its near-term forecast for the next-generation notebooks.

An estimated 10.3 million ultrabooks will ship worldwide in 2012, according to IHS. This is down from the previous forecast issued earlier in 2012 of 22 million units. In the newly-adjusted forecast for 2012, more than half of the shipments for the year are expected to come in the fourth quarter, the reasearch firm noted.

Along with the revised figures for 2012, shipments have also been modified for 2013. IHS now projects the shipments next year will rise to 44 million, down from its previous outlook of 61 million.

"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," said Craig Stice, senior principal analyst for compute platforms at IHS. "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."

Even so, challenges stemming from the nebulous marketing and unappealing price surrounding the ultrabook can be overcome, IHS believes, paving the way for shipments to rise by more than 300% in 2013. Growth is also expected to continue for the foreseeable future, with shipments expanding to 95 million units by 2016. This will drive long-term growth for devices used in ultrabooks, including motion sensors, IHS said.

Beyond the marketing shortcomings, ultrabooks need to get more systems down to the US$600 price range in order to hit the volume level needed to enter the mainstream, down from prices at the US$1,000 level now, IHS indicated. If ultrabooks using the new Windows 8 operating system come close to the US$600-700 range in 2013, while adding in an attractive new consumer feature such as touchscreen, a good chance exists for strong sales in 2013. If not—and ultrabooks stay at the US$1,000 level—their sales will continue to struggle in 2013 as they must compete against lower-priced options, such as tablets and smartphones.

"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," Stice said.

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

While Intel hasn't given up on ultrabooks in 2012, the microprocessor giant at its recent Intel Developer Forum (IDF) turned its attention to 2013, when it believes that everything will come together with the mid-2013 introduction of the company's new microprocessor—dubbed Haswell. Intel described 2013 as a once-in-a-decade opportunity for companies to reinvent the PC, with its new Haswell microprocessor catalyzing the ultrabook revolution.

Haswell, Intel's fourth-generation core microprocessor family, will offer better performance with lower power consumption. Because of these attributes, Haswell will serve as the main core microprocessor for ultrabooks. The microprocessor will provide Intel Identity Protection Technology to improve security, and will also support multiple displays and high-definition 4K monitors with DisplayPort 1.2.

Beyond the ultrathin and ultralight form factor, Intel at IDF focused on new consumer-friendly features to enhance the attraction of ultrabooks. The focus at several briefings centered on touchscreen technology in ultrabooks, in conjunction with the Windows 8 launch in October. Intel at IDF claimed there are 40 ultrabook designs in progress with touchscreens.

Other prominent new features being incorporated into the next-generation ultrabooks are voice recognition;security features; multiple sensors including GPS, accelerometers and gyroscopes; and hand-gesture recognition, an attractive option for the gaming market