IHS iSuppli: High Prices Hindering Ultrabooks

Ultrabook pricing needs to come down significantly, if PC manufacturers are to see the levels of shipments earlier forecast for the thin-and-light notebooks with Intel inside, California-based research firm IHS iSuppli reported on 1 October.

IHS dropped its 2012 Ultrabook shipment forecast from 22 million units to 10.3 million, adding that more than half the expected shipments will happen in the fourth quarter, after Microsoft’s release of Windows 8.

Ultrabooks will not meet expectations

In August, IDC reported that the entire PC market will remain “depressed until Windows 8 products hit the shelves”.

IHS also lowered its Ultrabook shipment estimates for 2013, from 61 million units to 44 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. This is especially a problem amid all the hype surrounding media tablets and smartphones, Craig Stice, an IHS senior principal analyst, said in a statement.

“When combined with other factors, including prohibitively high pricing, this means that Ultrabook sales will not meet expectations in 2012,” Stice continued.

IHS advises that Ultrabook pricing be lowered from around $1,000 (£620) to a $600 to $700 range next year, in order for the devices to enter the mainstream. With lower prices and desirable features such as touch-screens – an increasingly common feature included to complement Microsoft’s upcoming Windows 8 operating system – a “good chance exists for strong sales in 2013”, wrote IHS.

With the “nebulous marketing and unappealing price” of Ultrabooks overcome, the research firm added, the market could see a rise in shipments of more than 300 percent in 2013.

IHS expects Ultrabook shipments to grow to 95 million units by 2016, which, along the way, will help the long-term growth of components used in the notebooks, such as motion sensors.

The firm added that, while Intel, the chip maker that designed the Ultrabook designation, hasn’t given up on the category, at the Intel Developer Forum (IDF) in September, its attention was instead turned to “Haswell”, its fourth-generation core microprocessors, which will begin shipping in mid-2013.

The Haswell chips will offer still better performance with lower power consumption and so become the “main core microprocessor for Ultrabooks”.

Otellini comments

In April 2011, Intel said that 75 Ultrabook designs were poised to enter the market. At IDF this year, it said there are 40 Ultrabook designs in progress with touch-screens.

With the Microsoft-Intel relationship a critical one, Intel issued a 26 September statement responding to what it called “unsubstantiated news reports” regarding comments made by Intel chief executive Paul Otellini.

The same day, Bloomberg reported, citing an unnamed source, that Otellini told employees in Taiwan that Windows 8 “is being released before it’s fully ready“.

Otellini reportedly added that releasing the OS “before it’s fully baked is the right move, and Microsoft can make improvements after it ships”.

The Intel statement noted that the companies have a “long and successful heritage” of working together and “Intel fully expects this to continue with Windows 8”.

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