Ultrabook sales fall short of expectations

To grab more of the market, PC makers need to bring prices down, IHS Suppli says

Worldwide ultrabook shipments are falling short -- way short-- of expectations, according to a report released Monday.

IHS iSuppli, in a forecast earlier this year, said 22 million ultrabooks would be sold this year. However, the analyst firm lowered its forecast and said the industry is on track to ship 10.3 million ultrabooks worldwide in 2012.

The bad news for the ultrabook market doesn't end there.

The earlier projection for 61 million global shipments in 2013 has been reduced to 44 million, IHS stated.

"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," said Craig Stice, a senior principal analyst at IHS, in a statement. "This is especially a problem amid all the hype surrounding media tablets and smartphones. When combined with other factors, including prohibitively high pricing, this means that ultrabook sales will not meet expectations in 2012."

Despite the challenges the market is facing from the high interest in tablets and smartphones, IHS foresees improved growth in the ultrabook market. It may not hit earlier expectations in 2013, but it's still predicted to show a 300% increase over this year.

"Growth is also expected to continue for the foreseeable future, with shipments expanding to 95 million units by 2016," the analyst firm noted. "This will drive long-term growth for devices used in ultrabooks, including motion sensors."

PC makers generally have been looking to ultrabooks to boost the ailing market.

Lenovo , which recently rose to the number 2 position in the worldwide PC market, said this spring that it planned to push ultrabooks in its effort reach to the top position held by Hewlett-Packard.

"We're confident that this is going to grow our business," said Nick Reynolds, an executive director for Lenovo, in a previous interview.

According to IHS, to kick start the ultrabook market, PC makers need to bring prices down.

Stice said ultrabook prices to get down from around $1,000 to the $600 range to build up enough sales volume to catch the mainstream market.

If ultrabooks with the upcoming Windows 8 operating system come close to the $600 to $700 range next year, while adding features like a touchscreen, the market should see strong sales in 2013, he added.

"With the economy languishing," said Stice, "ultrabook sellers may have trouble finding buyers at the current pricing, especially with fierce competition from new mobile computing gadgets such as the iPhone 5, Kindle Fire HD and forthcoming Microsoft Surface."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed . Her email address is sgaudin@computerworld.com.

See more by Sharon Gaudin on Computerworld.com.

Copyright © 2012 IDG Communications, Inc.

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