Ultrabook sales are going to be pretty disappointing this year, according to a report from IHS iSuppli. And that's bad news for Intel and the PC makers who use its chips.
Intel shows off an ultrabook hybrid device.
(Credit: Brooke Crothers/CNET)
IHS slashed its estimates for shipments of the thin and light notebooks to 10.3 million this year, down from its previous forecast of 22 million. More than half of those shipments should come in the fourth quarter, the tech research firm said, likely boosted by the introduction of Microsoft's new Windows operating system.
IHS also expects 2013 to be less rosy, with shipments totalling 44 million instead of its prior view for 61 million. However, sales should continue growing over the next few years, totalling about 95 million units by 2016.
Intel has spent oodles of money marketing ultrabooks, but the effort is falling flat so far. Consumers are opting for shiny new smartphones and tablets instead of notebooks. And pricing hasn't yet declined enough to drive widespread adoption. Ultrabooks are expected to sell at mainstream prices — around AU$800 — but most still cost AU$1300 or more.
"There once was a time when everyone knew the 'Dude you're getting a Dell' slogan," IHS analyst Craig Stice said in the release. "Nowadays, no one can remember a tagline for a new PC product, including for any single ultrabook. 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."
PC market growth has slowed of late as consumers, who are cautious about the global economy, hold off on computer purchases in favour of mobile devices. Intel, which has been driving the move to ultrabooks, earlier this year launched its biggest marketing campaign since the Centrino Wi-Fi chip to spur demand for the products. The company and its PC customers have been counting on ultrabooks to help reinvigorate PC sales, but sales so far have been disappointing.
Intel and the PC makers have said that this month's introduction of Microsoft's new Windows 8 operating system, which has touch features and other capabilities, would help ultrabook sales. Intel, which in August lowered its expectations for third-quarter revenue by about US$1 billion, has maintained that ultrabooks would make up about 40 per cent of consumer notebook sales by the end of the year.
Today's forecast from IHS raises some fresh concerns about Intel's ability to meet that guidance. The firm noted that part of the reason for its lowered forecast is Intel's "increasingly stringent set of definitions for ultrabooks" that has caused many notebooks to be relabelled as "ultrathins".
But IHS also noted that ultrabooks have the chance to take off in 2013 if new Windows 8 devices reach the US$600 to US$700 level in the US. And Intel's new processor, codenamed Haswell and expected in mid-2013, could also help computer markets to "reinvent the PC".
"Challenges stemming from the nebulous marketing and unappealing price surrounding the ultrabook can be overcome," IHS said, "paving the way for shipments to rise by more than 300 per cent in 2013."