Ultrabooks To Deliver Ultrafast Growth (But Only If Prices Held To Less Than $1,000

iSuppli’s Matthew Wilkins reports that in a bid to stave off the rising competitive threat posed by media tablets, the mobile PC market is embracing the new ultrabook platform in a big way, with shipments expected to rise to account for more than 40 percent of all notebooks by 2015, according to the IHS iSuppli Compute Platforms service.

Ultrabooks will represent 43 percent of global notebook PC shipments in 2015, up from 2 percent in 2011 and 13 percent in 2012. Following their first year of shipments in 2011, Ultrabook penetration of the notebook market will increase rapidly, rising to 28 percent in 2013 and to 38 percent in 2014.

“To compete with media tablets, notebook PCs must become sexier and more appealing to consumers,” says Wilkins, principal analyst, compute platforms at IHS. “With media tablets having already reversed the expansion of the previously fast-growing netbook platform, PC makers now are keenly aware that the notebook must evolve to maintain market growth and relevance. Enter the ultrabook, which borrows some of the form-factor and user-interface advantages of the media tablet to enhance the allure of the venerable notebook.”

While media tablets aren’t expected to bring an end to the notebook market, they are contributing to slowing growth in the segment.

Mainly driven by Apple Inc.’s iPad, the media tablet market is set to boom in the coming years, with worldwide shipments rising at a compound annual growth rate (CAGR) more than 42 percent from 2011 to 2015. Meanwhile, the notebook market has entered a stage of maturity, with shipments increasing at a CAGR of only 10 percent during the same period.

Ultrabooks Unveiled

Ultrabooks are defined as notebooks that are extremely light and thin, at less than 0.8 inches in thickness. While ultrabooks employ a full PC operating system like Microsoft Windows, they also add features now commonly found in media tablets, such as instant-on activation, always-connected wireless links, solid state drives and battery lives that are longer than eight hours on a single charge. Ultrabooks are targeted to be priced at less than $1,000, although most of the early models are more expensive.

Future ultrabooks are expected to employ convertible form factors and touch screens, allowing owners to use these devices either as notebooks or tablets, depending on their needs.

The initial target market for ultrabooks will be consumers. However, PC makers also are likely to develop models aimed at corporate users.

Intel Impetus

While multiple companies are pushing ultrabooks, the strongest supporter is PC microprocessor giant Intel Corp., which made the announcement at Computex Taipei 2011 and discussed its concept of the platform at its Intel Developer Forum (IDF) in September.

Intel’s vision of the ultrabook includes the use of the company’s second-generation Core microprocessors, along with Microsoft’s upcoming Windows 8 operating system. The company said the first Intel-style Ultrabooks are expected to be shipping in time for the Christmas sales season this year, and some PC original equipment manufacturers – including Acer and Asustek – already are selling the products.

Intel at IDF also previewed the next generation of ultrabooks set for release in 2012 that will be based on the company’s third-generation Core microprocessor line, codenamed Ivy Bridge.

Infection Point

While Intel’s ultrabook push could be viewed as a reaction to the rise of media tablets, the effort could set the stage for the revitalization of the electronics supply chain.

“With the introduction of the ultrabook, the computing industry is poised for yet another paradigm shift,” comments Len Jelinek, research director and analyst, semiconductor manufacturing at IHS. “The technology now exists that actually could bring about a convergence of major mobile devices. If an attractive price point can be achieved and the consumer deems this a must-have product, the entire semiconductor manufacturing supply chain could rapidly reorient itself to serve the fast-growing ultrabook market.”

Jelinek predicted this event could bring to an end the current slowdown in the semiconductor and electronics manufacturing industries.

“In the age of the ultrabook, the demand for technology would not be limited to only a few companies,” Jelinek says. “Ultrabooks require a comprehensive bill of materials, so companies focused on memory, logic and power management all would participate in the revitalization of demand.”

One potential significant growth area would be in flash memory. The transition from the hard disk drives commonly used in notebooks to the solid state drives employed in ultrabooks will increase unit demand for flash memory while stabilizing chip average selling prices. The benefits would not just be confined to chip manufacturers alone but also positively impact other supply chain participants, such as battery suppliers and electronics contract manufacturers.

Learn More at IHS iSuppli Home & Consumer Electronics:
http://bit.ly/sceQdI