Tag: ultrabooks

Why UltraBooks Have Been Slow to Take Off

One of Intel’s big programs for this year has been the development and marketing of a new line of slimline notebooks called Ultrabooks. This product is really following in Apple’s MacBook Air footprints, a product that has been very successful for Apple.

In reality, as technology has gotten smaller and more powerful, it was inevitable that laptops would follow Apple’s MacBook Air example and become thinner, lighter and still have serious computing power. To that end, Intel and almost all of their OEM partners have jumped on the Ultrabook bandwagon.

In the spring, Intel and their partners launched a major marketing push for Ultrabooks and have spent a huge amount of money trying to get the attention of business and consumer users to try and move over to the Ultrabook platform of notebooks. Also, most OEM’s have created some great versions of Ultrabooks that at the very least has caught the eye of these folks who really do like the idea of a lighter laptop.

However, the cheapest Ultrabook starts at $699 and is a relatively low powered system. But most of the Ultrabooks have been priced in the $799-$899 range, a price that although reasonable, we believe may not be an attractive price range for consumers. And although business users are OK with these upper endprices for laptops, they continue to want laptops that have a lot of power and features that can’t be crammed into these thinner laptops. This has been at the heart of the slow uptake in Ultrabook purchases so far.

But there seems to be another reason for the slow uptake in Ultrabooks with consumers and even many business users. We have been privy to some very interesting research that shows that the market for laptops appears to be bifurcating into one that is focused on low cost notebooks and the other on the higher end of the notebook market. The research suggests that the mid market for laptops is declining and that laptops priced at $699-$899 may be going away as users either opt for low cost laptops or if they want more powerful laptops, buy up to laptops in the $999-$1299 range instead.

Part of this lack of overwhelming interest in the $699-$799 price range is also due to the iPad. The interest in the iPad remains high, and right now from our research we are learning much higher than notebooks by the mass market. Because of that UltraBooks priced around the range of the iPad seem to of less interest. It appears for the mass market next generation notebooks need to be lower cost than the iPad or much higher and include valuable innovations in the upper end to make it attractive.

One could also argue that Windows 8 could play a role but many consumers in the market we speak to are not that interested in Windows 8 yet.

If true, this is bad news for the current crop of Ultrabooks. Due to component costs and other related marketing costs, almost all of the Ultrabooks are priced between $699-$899 with a few even at $999-$1200. To be fair, many upper end models that are really high-powered laptops are being called Ultrabooks, but at this price they are considered upper end laptops.

This research reflects similar information we are getting from consumers. Over the last 3 weeks I have spoken to dozens of consumers about their back to school or fall laptop purchases and all planned to spend no more than $599 for a laptop. All where aware of Ultrabooks and while they would have liked to have one, they did not have the budget for anything more then $599. And if they were buying it for their kids as part of the back to school requirements, the prices they planned to spend was closer to $399 to $499 for laptops this year.

If it is true that the mid market for laptops in the $699-$899 range is going to evaporate, it will put a lot of pressure on the OEMs next year to try and get prices down on Ultrabooks if they want any traction with consumers in 2013. The good news for them is that business users seem to want to buy up and laptops in the $999-$1299 range have good margins which means they can actually make some money on these laptops.

Ultimately, Ultrabooks will be successful since the technology is here to make them lighter, thinner and still have good computing power. But for them to sell in the volumes OEM’s need to make money on low end laptops they have to have more consumer friendly pricing to really take off.

Surface vs. UltraBooks

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.

Affordable UltraBooks are Coming But They aren’t UltraBooks

There are looming PC wars coming and it isn’t between Macs and Windows based notebooks. If you follow this industry you know that Intel is seeking to rejuvenate the notebook market. They are doing this by putting quite a bit of marketing weight behind the term UltraBook. To spur development in this category, Intel is putting some very specific hardware specifications around the term that OEMs like Dell, HP, Acer, etc., must conform to if they want their notebook to be called an UltraBook and take advantage of Intel’s marketing dollars for UltraBooks. Obviously every OEM is making UltraBooks.

The challenge as I see it for UltraBooks is that many of the first ones at launch and perhaps those that follow will be priced more in the premium price range rather than value. Many of the early UltraBooks we will see will be $699 and above although a few may get lower and many will skew higher as well. What our consumer data from our own research and consumer interviews is telling us is that Apple has about a $250 grace price point. Consumers know Apple’s Macbook Pro and MacBook Air lines are not the cheapest products on the market. For MacBook intenders, any comparable product must be at least $250 less than a comparable MacBook product to fully sway a consumer when price comes into play. But as I have pointed out before price is becoming less and less of an issue in mature markets.

Although we expect UltraBooks to continue to drop in price there is a sub-category of notebooks emerging which may be even more interesting.

If It Looks Like an UltraBook…

Intel wants to own the UltraBook category. They are investing a lot of money around the term. However, there is a strict set of requirements notebook OEMs must abide by if they want to use the term. If there is one thing I have learned in my 12 years of being an industry analyst it is that OEMs don’t generally like being told what they can and can’t do with their hardware designs. Every OEM wants to take advantage of the thin and light designs driving UltraBooks but they may want to vary the CPU capabilities, and what if they want to use an non-Intel chip for a design that looks exactly like an UltraBook? The answer is they can’t call it an UltraBook.

Earlier in the week AMD launched a very impressive 2nd-Generation A-Series APU, codenamed “Trinity.” Many OEMs have strong relationships with AMD and will most likely use these chips in their lineup of notebooks. So how do OEMs cover their bases by making non-Intel UltraBooks? Well, HP recently launched a new term called SleekBooks. We call this category Ultrathins and we expect many Ultrathins to enter the market well below the price of UltraBooks. And that is what makes this so interesting.

While Intel is going out and spending millions of dollars marketing the UltraBook term, it will indirectly benefit a range of competing platforms. Ultrathins will look nearly identical to UltraBooks with the only minor configurations or specifications, that many consumers may not even notice. The bottom line is that consumers will walk into retail and see UltraBooks, SleekBooks, and perhaps more terms on the way, and with all of these options consumers may very well go with price and walk with with something other than an UltraBook. Perhaps even not knowing they didn’t purchase an UltraBook.

Now, on the surface it may seem as though Intel may not like this scenario. But realistically Intel simply wanted to rejuvenate the notebook category. I believe their marketing of UltraBooks is going to do just that. Even though it may very well help their competitors chipsets and even to a degree help Apple.

I have a feeling there is a large chunk of consumers who are due for a notebook upgrade. The iPad has, for some, served as a sufficient supplement to their existing notebook making it easier to delay the purchase of a new notebook. Whether it is UltraBooks or these new thin and lights that will look and smell like UltraBooks but be priced quite a bit lower, we expect at least a short term positive jump the overall notebook category over the next few years.

Mac Momentum

This is one of the more interesting things to watch. Mac sales are growing at incredible rates. It seems each quarter Apple is selling more Macs than ever before. I was recently in an Apple store with a newly renovated training center. When I walked into the store I assumed the training tables would be filled with people learning how to use their iPads. Instead every table and every consumer at that table was learning how to use the new Mac they just purchased.

If Ultrathins that are very thin, light, and powerful hit the market below the $599 price like we think may happen, it could provide a serious jump start to the notebook category. And at $599 or lower the prices of quality notebooks will be significantly less than an entry level MacBook Air, which may be a key in slowing down Apple’s momentum with Macs.

The Notebook form factor is facing important times as consumers are faced with new questions about computing and their own computing preferences due to the iPad. Consumers are asking new questions about their own computing needs and looking more intently for specific solutions–especially those shopping for new notebooks.

This is exciting and challenging for many in the notebook ecosystem.

Intel and Microsoft’s Secret Weapon Against Apple

Intel and their partners are about to launch the biggest promotion in a decade for a new product category called UltraBooks. Microsoft is also about to launch a major update to Windows called Windows 8 that introduces a new user interface based on touch with their new Metro UI. Together they are critical products for the future of each company individually.

Form Factor Evolution

In the case of UltraBooks, I actually see them as the natural evolution of laptops and not revolutionary as Intel would like us to think. Rather, they take advantage of the industry’s constant push to make things smaller, lighter, thinner and have better battery life. For mainstream consumers who have had to lug around their rather bulky laptops for the last 5 years, they would be justified in asking Intel and other Wintel vendors “what took you so long?” Given the fact that Apple has had their MacBook Air on the market for 5 years and it has defined what an Ultrabook should be.

With Windows 8 and Metro, Microsoft is also following an evolutionary path towards touch interfaces with their Metro based smart phones and soon to be Metro based tablets and PCs. Again, consumers could ask Microsoft “what took you so long?” since Apple has had their touch UI on the iPhone for 5 years and on their iPads for 2 years.

But both products have some interesting challenges attached to them when they launch later this year. In the case of UltraBooks, they most likely will have starting prices of at least $799-$899 although I hear there could be at least one that is pretty stripped down coming out at around $699.00. At these prices, they completely miss the mainstream laptop market that represents the bulk of laptops sold and are priced from $299 to $599.

In the case of Windows 8 and Metro, while Metro is great on Microsoft’s phones and works very well on the tablets I have tested it on, it does not translate well to the laptop or PC since 100% of existing PCs don’t have touch screens on them. And most of the PC vendors are not putting touch screens on the majority of their new laptops because to do so adds at least another $100-$150 in cost to the customer. If you have tested the consumer preview of Windows 8 and Metro on an existing laptop, you know how frustrating it is to use it on existing trackpads. I consider this an Achilles’ heal for Windows 8 and one that could really hurt its short-term prospects.

To be fair, Microsoft has recently (three weeks ago) released recommended guidelines for next generation track pads and a new design I have seen from Synaptics could make laptops work well with Metro once it gets into new laptops. But this should have been something Microsoft focused on a year ago and had all of the new laptops “Metro” enabled at launch. My sense is that Microsoft should have only launched Metro on tablets this year and gradually moved Windows 8 Metro to the consumer PC markets once they had laptops optimized for it.

Instead, I see a lot of consumer confusion on the horizon when they try to use Metro on existing trackpads and any other non-touch input device, as the experience will be confusing at first and frustrating afterwards. Also, you notice that Apple has not put touch screens on their laptops and desktops and instead, worked extra hard to create trackpads and external trackpads that map to the touch experience on the iPhone and iPad.

I consider the initial pricing for UltraBooks and putting Metro on laptops and desktops issues that could slow down any early adoption of these products this year and perhaps deliver a graduated adoption in the future. The two companies do have a secret weapon in the works that could get them a lot of kudo’s from the marketplace and be a key component in getting users really interested in Intel and Microsoft again.

A New Category

The secret weapon comes in the form of a new form factor often referred to as “hybrids.” These are either tablets that can be docked into a keyboard, turning them into a laptop or a laptop with a detachable keyboard. You might think they are one in the same, but they are very different in terms of design goals. In the case of the first, the design is specifically around the tablet and the keyboard dock is modular. We already have a lot of examples of this with the iPad where the tablet is the central device and the attachable Bluetooth keyboards are more of an after thought. In this case the keyboard just supports the input functions of the tablet. The same is true with the Asus Transformer line of devices.

But in the latter case, the design is around a slim laptop case and the screen (tablet) can be taken off and used as a tablet. I believe this latter design is the secret weapon that Microsoft and Intel can use against Apple and at least on paper, give Apple a run for the money especially in business and the enterprise. To a lesser extent it could be hot in some consumer segments where the keyboard is critical to what they do with a tablet and want a laptop centered experience as well.

This is where Apple’s current strategy can be challenged as they are offering these market two distinct products. There is the iPad that stands by itself, and then the MacBook Air, their UltraBook that like the iPad, also stands by itself as a separate product. The key reason is that each has their own operating system and although Mountain Lion, Apple’s new version of OS X brings a lot of iPad like iOS features to OSX, they are still separate and distinct operating systems.

But with the introduction of Windows 8 and used especially on a laptop centered hybrid in which the screen (tablet) can be detached and used as a true tablet that takes full advantage of Metro, Microsoft and Intel can give their customers the best of both worlds in a single device. When in “UltraBook” laptop mode, users can use Windows 7 and its comfortable UI they are used to and have available to them the over hundreds of thousands of Windows apps as is. But when the screen detaches, it automatically defaults to the Metro UI and the touch experience is now central to the device. Now apps designed for Metro can give the users a rich tablet experience out of the box. Sure, they could default to old Windows programs if needed, but running those on a tablet is clunky at best.

If done right, the user would end up with a Windows 8 UltraBook with a detachable screen (tablet) and have to only buy one device instead of two. Our research shows that IT and even some consumers would have no trouble paying $999 and above for this combo product. At this price it would be a bargain. Most IT purchased laptops are in the $699-$999 range now and those who bought iPads to augment their users work experiences cost at least $599 so a combo device say at even $1299-$1399 is more then reasonable for them. Intel knows this and believes that as much as 50% of all Windows tablets will be hybrids. And Microsoft will push these types of designed products especially if the uptake on Windows 8 on laptops doesn’t take off as planned.

Could anything potentially derail Intel and Microsoft’s “hybrid” strategy? Well, if Apple applied their great innovative design knowledge to creating a hybrid that blends the iPad and the MacBook Air into a single device, it could have an impact their ability to dominate this market. On the other hand, it would validate Intel and Microsoft’s strategy as well. If they beat Apple to the market with their version, which is highly likely since at least four hybrids are set to come out by Oct, it could be the “hero” product of the launch that shows users the value of an X 86 ecosystem and highlight to Windows users the need for Ultrabooks and Tablets and Win 8.

2012: A Year of Innovation?

One of the things I look at in order to get an idea of what the next years worth of innovations will bring is the semiconductor industry. Given what I am seeing from the various ARM vendors like NVIDIA, Qualcomm, Marvell and TI as well as from Intel and AMD, I am encouraged.

The primary industry that stands to gain from new semiconductor innovations is the mobile industry. Namely the hot category of tablets and smart phones. That is not to say that the PC will be left out, for example Intel brought attention to the concept of “Ultra-Books” at this years Computex.
Continue reading 2012: A Year of Innovation?

Will UltraBooks Make PCs Interesting Again?

I ask this question specifically because this is the question those who make PC’s are asking. In particular this initiative to make the PC relevant again is being driven by Intel and in part by AMD. This sounds rather silly because of course the PC is still relevant, the fact of the matter is the PC has become boring.

PC’s are mainstream and there isn’t much interesting about them these days. Consumers are familiar with them and understand what they are and what they are good for. Consumers are more interested in learning about things like smart phones and tablets to which they are still in discovery mode with.
Continue reading Will UltraBooks Make PCs Interesting Again?