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Ultrabooks on the decline

About a month ago, Intel cut the outlook for its Q3 earnings by $1.1 billion. The reduction in earnings indicated that perhaps Intel's ultrabooks weren't selling as well as the company wanted. Intel originally hailed the ultrabook as the next big thing to revive the struggling PC economy. 
 
So far, ultrabooks haven't performed as well as expected in large part due to the high cost of the machines and increasing popularity of tablets. Research firm IHS iSuppli has cut its shipment expectations for ultrabooks globally during 2012. Previously, iSuppli expected 22 million ultrabooks to ship globally during 2012. The research firm has now cut that estimate to 10.3 million for the entire year.
 
The research firm cites two major reasons for poor sales in the ultrabook realm citing "nebulous marketing and unappealing price." ISuppli also points a finger at Intel as having to own up to standards that are too strict, confusing the marketplace between what's an ultrabook and what is an ultrathin notebook.


Sony VAIO T13
 
"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," Craig Stice, IHS's senior principal analyst for computer platforms, wrote in the report.
 
The research firm also criticized pricing of ultrabooks that sit near $1000 for most units. The company believes that a price cut bringing ultrabooks and the $600-$700 price range could increase sales next year. When Intel first started counting the ultrabook, $600-$700 was the price range many expected the machines to come to market in.
 
ISuppli believes that Intel's new processor, code-named Haswell, expected to launch in the middle of 2013 will also help improve sales in the ultrabook market. Windows 8 is also expected to have an impact on sales in the segment.

Source: CNN



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RE: Not really
By Solandri on 10/2/2012 1:50:49 PM , Rating: 2
Apple and Intel marketing has somehow convinced people that these are some new category of notebook. They're not new, just the name is new. In the past, notebooks in this category have been called thin & light, and ultraslims. Even the tapered form doesn't originate with the Apple Air - Sony had one in 2003. They're great if you need the portability and are willing to pay extra for it (I usually have). But as others have posted, they're a dead end if you need significant upgrades. I got around the problem by selling the old one and buying a new one every 1.5-2 years.

Also, from the article:
quote:
About a month ago, Intel cut the outlook for its Q3 earnings by $1.1 billion. The reduction in earnings indicated that perhaps Intel's ultrabooks weren't selling as well as the company wanted.

That doesn't make sense. Intel makes money off of every CPU and chipset sold. If ultrabooks weren't selling well, you'd expect people to be buying regular notebooks instead and Intel's earnings would remain about the same. For Intel's earnings to be down, laptop and/or desktop sales overall have to be down. Which wouldn't be surprising IMHO since CPUs have gotten so fast that people can realistically buy a system and use it for 5-7 years now, whereas 3-4 years was more realistic in the past. Longer useful lifespan = fewer sales per year.


RE: Not really
By RufusM on 10/2/2012 2:09:08 PM , Rating: 3
Here's the typical scenario:

Thin and light = more expensive (ultrabook) or slower (netbook)
Thicker and heavier = less expensive (typical notebook) or faster (high-powered notebook)

You've hit it partially that laptop sales are down, but where the market is really expanding is tablet sales. Low end notebook sales are being trounced by tablets. Tablets offer a great experience for the typical netbook activities like email and web browsing, plus they are the cool thing to have, adding cache to the tablet.

In some cases, I would argue smartphones are also cutting into the low end of the notebook market. I know a number of people that didn't buy a new laptop because they do the same things on their phone all day long and it's a good-enough experience.


RE: Not really
By RufusM on 10/2/2012 2:10:23 PM , Rating: 2
I forgot to add that Intel is not part of the tablet market yet, so they are not seeing revenue from that segments growth.


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