Surface vs. UltraBooks

Ben Bajarin / June 26th, 2012

Last week I pointed out the competitive dilemma for OEMs when it comes to Surface. A key point in my mind is how tablets are becoming the next generation computers for the mass market. What I pointed out in my column about notebooks becoming history is that the notebook will remain relevant but it will do so for only a segment of the market rather than the market as a whole, which has historically been the case.

When we started doing consumer research with the late adopters (anyone not an early adopter) we started realizing that for a large majority of consumers a notebook was overkill with respect to what they did with the product on a daily basis. We discovered that many consumers purchased notebooks due to their convenience around portability more than anything else. It is this fundamental point which leads me to be convinced of the tablet form factor. This is also why the tablet + desktop solution becomes even more interesting.

Further Reading: Notebooks are the Past, Tablets are the Future

With that context in mind, I am beginning to wonder if Microsoft launching their own line of tablets hurts the OEMs in a much more important area than just competing with them –namely with their notebook products. If this industry is headed in the direction I think then more interest may be given to Surface like products, by the masses, than notebooks in 2013 particularly. I am wondering if by launching Surface Microsoft has not just potentially hurt interest in their partners notebooks over the short term.

If what we write here on our site as well as feedback I have received from many media outlets is an indication of market interest, then what I am proposing would be on track. Our content on tablets and recently Surface far exceeds the amount of reads than we write about notebooks and UltraBooks in particular. I have heard similar things from other media that tablet content does better than notebook content in terms of interest.

Intel is trying to inject life into the notebook category with their UltraBook campaign and Microsoft has just injected life into tablets built for Windows 8. Surface’s form factor is different enough from what most consumers are used to with a notebook that I believe there will be serious consideration for it by anyone who is in the market for Windows notebook. Time will tell how many will buy surface but I believe it matches up with enough trends we are seeing to at least generate interest.

However, if there is enough interest, Surface may very well impact notebook sales for Microsoft partners which will hurt OEMs more in the short term than Microsoft competing with them in a segment. In this case Surface is more disruptive to OEMs notebook strategy than their tablet strategy.

Of course another scenario could be that Surface plays the spoiler for both Win 8 tablets and Windows notebook. It may be that the wide array of differences in the Windows 8 ecosystem may be confusing for customers who then turn and consider the Apple ecosystem. In fact 2013 will be a very interesting year because the feedback we are getting from both tablet and notebook intenders will heavily evaluate both ecosystems before making a decision. Consumers will choose with their wallet and perhaps more importantly with their loyalty and it will make 2013 and fascinating year.

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio
  • Peter Scott

    I think once the hype dies down, the surface will have no real impact on Notebooks/Ultrabooks.

    It is the classical Jack of all trades/master of none problem.

    Even a lowly netbook has a better keyboard.

    A typical 13″ Ultrabook, will have a bigger screen (important for getting more on the screen for desktop/laptop applications) and more important a MUCH better keyboard, not limited to netbook key spacings. A real ultrabook, also has much better laptop packaging than a Kickstand/Magnetic attached (weak hinge).

    In short if you really want to do some serious typing on your portable, a real laptop will serve you much better.

    • Rich

      “It is the classical Jack of all trades/master of none problem.”

      That sounds believable but we have to see what the market tells us…they could surprise us. One thing that seems certain enough is that Microsoft is taking quite a risk with the Surface.

  • VictorV

    The ultrabook is an effort from Intel to try to mantain and refresh the notebook market, talking in simple ways is showing new specs around the mobility and ubiquity.

  • Michael

    I agree somewhat … think of what the tablets are offering

    Lightness

    Long Battery life
    Touch Screen
    Permanent data connection through 3/4G
    Lower price point

    As computers meet these requirements better and better the squeeze will be on.

    I’ll be betting that people, giving the choice of the two will go for the one with more function.

    Unless the pads are super cheap making it sensible to have both devices.

    Will people have a Camera, a tablet, a large format smartphone and an ultrabook? I’ll be betting that two out of the four are always left at home. As the specification of UBs allows more convenience there is less and less space for tablets.

    They are analogous to the iPod … sqeezed out by devices with a wider range of functions. Not this next generation of UBs as touch screens come in, but maybe the one after when the five specification points above really get some refinement.

  • mhikl

    As you pointed out, Ben, you have written on this topic before; I believe you are one of the first if not first major analyst suggesting that the DT computer may make a come back as the decline of the notebook continues. I also believe you or someone on Tec P was one of the first to stop enjoying the funny stuff and begin looking at the cracks in the Surface tablet.

    The MicroSoft Surface tablet may speed up the process or it may plod along as a hobby tablet while the iPad does its magic. You convinced me and I bought the third generation iPad because of your arguments. I find the iPad a bit heavy (does it really need to run so long between charging) and I still refer to my MB for some work better done with a keyboard, but the MB is dying and my next purchase will be a Mac mini, if Apple bothers to update the line. It will service my home needs, my heavy work and my storage needs for music and video. It works well enough on any of our flatscreen TVs and an app has come out that would even let me see it on my iPad, I believe. My MB will be dragged out in necessity but I suspect will eventually be called upon less and less frequently.

    Reading that the iPhone alone dwarfs the once mighty MicroSoft suggests to me that if the Surface does not live up to the aspirations of Steve and Bill, the decline to irrelevance of the once mighty MicroSoft will just continue to plod along.

    —–

    A concern I would like to see you tackle is the wild swings of Apple stock. It is as though the company is still not being taken seriously. I am not an economist and haven’t an understanding of all the lingo and concepts but its P/E ratio still seems to be undervalued, and the talk on some news networks is that it somehow can’t keep up its growth without a new product every two or three years. (Two years is the rough time the iPad has been out! – Yet the iPod saved the company and it took five years to bring out its next major hit, the iPhone; and even that took some time to take off.) If this were another company I believe there would be nothing but blind accolades over such stellar performance.

    Cheers,

    Mike

    • benbajarin

      Ok, I will tackle it for tomorrow.

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