Ultrabooks to Outshine Tablets at 2012 CES

By CIOinsight  |  Posted 01-09-2012 Print Email
Ultrabooks, not tablet computers, will be the talk of the 2012 Consumer Electronics Show this week, according to industry analysts. Ultrabook pricing could curb early enthusiasm.

If one of themes of the 2011 Consumer Electronics Show was the rise of Google (NASDAQ:GOOG) Android tablets, this year's CES event will be the year the Microsoft (NASDAQ:MSFT) Windows laptop market is revitalized with so-called ultrabooks.

Ultrabooks are not supercomputers packed in small frames, or super electronic reading devices. They're simply less expensive, Windows versions of MacBook Air machines that use flash storage and boot up in 10 seconds or less. At between $700 and $1,000 apiece, and between 3 and 5 pounds, ultrabooks are this year's hot-ticket item at CES.

PC-making powers such as Lenovo, Hewlett-Packard (NYSE:HPQ), Acer, Asus, Dell (NASDAQ:DELL) and every other computer maker under the sun are expected to tout their ultrabooks at the show in Las Vegas this week. Forrester Research expects to see at least 50 of these computers at CES, with their makers touting their machines as "low-cost."

The reality, in this harsh economic climate, is that "low-cost" is relative. Tablets and netbooks, the darlings of past CES events, are both less expensive. As Forrester's Sarah Rotman Epps noted in a blog post Jan. 6:

"The prices, mostly in the $1,000 price range, are much more reasonable than they used to be for comparable PCs, but they're still not affordable for every PC buyer. In a September survey of 5,130 U.S. online consumers, we found that 22 percent of PC shoppers said they'd be interested in buying an ultrabook at the current prices. Not bad, but an indication that ultrabooks will appeal only to a certain segment of consumers, and won't replace every laptop on the shelves."

PC makers know this, which is why they are going for differentiation.

"If ultrabooks are only thin, light Mac Air knockoffs, they won't be very successful," industry analyst Jack Gold told eWEEK. "They need to be more. So yes, thin and light are important. And price is always an issue current devices are probably $700 to $900, so that is not cheap compared to $300-$500 mainstream notebooks."

Gold sees ultrabooks evolving over the next couple years. He expects the machines will:

  • achieve 8 to 10 hours of battery life by leveraging next-generation Intel Core chips;
  • awake from sleep in under 10 seconds;
  • feature more security controls for safer document sharing and Web surfing; and
  • include enhanced media creation and consumption capability.

Of course, the arrival of Microsoft's Windows 8 platform, a touch-oriented interface for tablets, will lead to touch-enabled ultrabooks and convertible tablet/notebook form factors with flip-over covers and extended slide-out screens.

"While a number of first-gen ultrabooks are going to be announced at CES, the real ultrabooks will emerge later this year with the new chips, new OS, and new user functionality and performance. That is when the true value of the new ultrabook devices will be judged," he said.

As with any other PC evolution, those first-generation ultrabooks we see hawked at CES for $700 to $1,000 could be purchased for half the cost by this time next year, if not sooner.

In the meantime, analysts such as Current Analysis analyst Avi Greengart see ultrabook pricing as a challenge:

"The consumer notebook market is extremely price sensitive, and even if vendors do significantly undercut the MacBook Air pricing somehow, ultrabooks will still come at a premium above regular notebooks. I believe that there is a segment of the market beyond just Apple devotees that is willing to pay for more portability, instant-on performance and style. Where I'm having trouble is assessing the size of this market segment, and whether there is really enough room for all the vendors who are chasing it."

Greengart is right to have pause; it's too early to tell what impact ultrabooks will have.

NPD DisplaySearch said in its recent mobile PC forecast that the current premium price points of ultrabooks will temper demand, with some supply limitations in the production of displays thin enough for these computers. To wit, tablet PCs will remain the growth accelerant in the overall mobile PC market in the short term.

"In the longer term, notebook PC shipments will bounce back as ASPs continue to decline, Windows 8 launches and new form factors, such as ultrabooks, continue to emerge," said Richard Shim, senior analyst at NPD DisplaySearch.

The truth is, we won't be able to gauge the demand for ultrabooks until we see the buzz the first-generation machines generate at the show this week, where more than 100,000 people are expected to descend on the Las Vegas Convention Center to feast their eyes on the latest computing crafts.

Consumer masses will have to signal interest in the devices with their wallets over the course of 2012 for us to get a better handle on the demand, or lack thereof.



 

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