Are ultrabooks dead in the water?

Ultrabooks, Windows-based laptops built by major makers as an answer to Apple's slim and stylish yet powerful MacBook Air, appear to be dead in the water, a CNN analysis said.

 

CNN Fortune said consumers have yet to fall for the ultrabooks, with analyst firms IDC and Gartner reporting sluggish shipments in the second quarter.

 

"Both IDC and Gartner reported sluggish shipments worldwide for the second quarter down 0.1 percent from the second quarter of last year at 87.5 million units. In the U.S., the numbers were a whole lot worse, shrinking 10.6 percent. While poor PC sales are nothing new -- the trend extends back seven straight quarters now -- the push to establish Ultrabooks as a standalone, high-end laptop category appears stalled," it said.

 

It added Intel's expectation of ultrabooks to make up 40 percent of all laptop sales by year's end now seems doubtful.

 

CNN cited Gartner figures showing Apple boasted real growth of 4.3 percent this quarter, while major vendors slumped.

 

Ultrabooks are notebook computers weighing less than four pounds and are under 0.8 inch thick with high-performance drives, "normal-sized" screens and long battery life.

 

Many upcoming models are expected to feature the new Intel Ivy Bridge architecture that consumes less power while increasing computing and graphics processing.

 

"Expect the marketing blitz to pick up steam as we get closer to traditional Back-to-School campaigns followed by Christmas shopping fever. Historically, most laptop purchases are made in the fourth quarter," CNN said.

 

However, CNN also noted that aside from the lack of oomph, market timing may be helping hold back the ultrabooks - Microsoft's new Windows 8 is coming.

 

Windows 8 promises to be a radical departure from previous versions of Windows, which will be "friendly" to tablets and computers with touchscreens.

 

"A lot of consumers don't want to be stuck with an outdated operating system in a few months," it said.

 

Early adopters

 

CNN quoted Mikako Kitagawa, principal analyst at Gartner, as saying in a July 11 statement that while Ultrabook was at first introduced in the market in 2011, the major promotion kicked off toward the end of 2Q12 with the IvyBridge-based Ultrabook release.

 

"This segment is still in an early adopter's stage," he said.

 

He added a big portion of R&D spending has been allocated to Ultrabook development, together with Intel's massive investments to establish the market segment.

 

Changing tactics

 

CNN also noted lackluster shipments of ultrabooks have some hardware manufacturers adapting their tactics.

 

In early June, new versions of Ultrabooks were announced that shaved off hundreds of dollars off their initial prices around $1,200, with some versions at nearly half the price of early models.

 

"The U.S. market suffered a double-digit contraction in the second quarter as market saturation and economic factors combine with anticipation of Windows 8 and other changes later in the year. In this context, consumers are delaying purchases, and vendors and retailers are slowing down their PC activities to clear existing inventories," said David Daoud, research director at IDC.

 

He added the situation is exacerbated by consumer notebook saturation, a slowing replacement cycle in the commercial sector, and the big macro-economic and political events affecting confidence and spending.

 

On the other hand, Microsoft is creating its own hybrid-tablet device, Surface, that runs a full version of Windows, with a touch screen and built-in keyboard, and synchronizes with its mobile operating system.

 

"It's way too early to know if Surface will impact consumers, but it will certainly impact its hardware partners. More uncertainty is not likely to be welcomed by Microsoft's hardware partners," CNN said.

 

"The trend may end up being a good for consumers hoping to snap up a deal but it's not going to cheer hardware manufacturers looking for signs of life in the market," it added. — TJD, GMA News