Technology advances won't pump up Ultrabook sales, analyst says

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Intel raised the curtain at CES 2013 this week on its "reference" design for the next generation of Ultrabooks, but despite the technological verve displayed in the new design, it won't be compelling enough to pump up the sagging sales for the notebook class, according to one analyst.

"What Intel needs to do to invigorate the PC market is get people to buy PCs sooner because people have been extending the life of their PCs and buying things like tablet computers," Ken Dulaney, vice president for mobile computing for Gartner in San Jose, Calif., explained in an interview.

"While the new Ultrabook is a testimony to the engineering prowess of Intel," he continued, "it doesn't change the market for notebooks."

Cool tech is not enough

Intel's vision for the next generation of Ultrabooks expected to appear in time for this year's holiday shopping season calls for a notebook that's thin (17mm or 0.66 inches), lightweight, touchscreen equipped, and equipped with an all-day battery life and a power-sipping Haswell processor.

Intel Haswell processor
Haswell processor

Intel displayed a next generation convertible Ultrabook in Las Vegas with a display that detached from the computer's body and could be used as a tablet. Batteries are located in both the notebook's body and the tablet display. Intel says the tablet could run for 10 hours and the notebook for 13 hours.

Intel pegged the price of the convertible unit to be in the $799-$899 range, but it expected other touchscreen Ultrabooks to sell for around $599.

While thinness and touchscreens are nice, they won't make the new Ultrabooks a compelling buy for consumers, contended Dulaney. "It's not really an Intel issue," he argued. "It's a Microsoft issue."

App gap

"The applications have to be created for these types of machines," he continued. "That's where the lag is."

A problem Dulaney sees with mixing a notebook with a tablet is screen size. "You really can't make one of these hybrid devices much bigger than 12 inches," he said. "You get a tablet much bigger than that, and it starts to get unwieldy and gets dropped."

The reference model displayed by Intel at CES had a 13-inch display when operating in notebook mode and 11 inches in tablet mode. The extra real estate as a slate allows the unit to be held more securely without obscuring the screen.

By limiting convertible laptops to smaller screen sizes, a whole segment of the market with a desire for a larger screen gets eliminated from the Ultrabook equation, Dulaney reasoned.

He acknowledged, however, that if Ultrabook makers departed from the convertible form factor, they could easily accommodate notebook shoppers looking for larger touchscreen sizes.

Disappointing sales

Software usage patterns also are contributing to the slow market response to Ultrabooks, according to Dulaney. "In previous generations of notebooks, there were such significant improvements in the notebooks that you were inclined to buy a notebook sooner rather than later," he said.

"But today, with more and more software moving to the browser," he continued, "that compelling reason isn't there. So people are taking their annual disposable electronics dollars and they're putting them toward other things—new smartphones, tablet computers, etc."

Last year was the first time that Intel has tried to ignite Ultrabook enthusiasm at CES. In 2012, the chipmaker predicted that 40 percent of the notebook market in 2012 would be Ultrabooks at year's end, and it spent $300 million in marketing to make that happen. Ultrabook shipments—not sales—were disappointing, however, just reaching 10.3 million units.

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