he remarkable boom in tablets - what Steve Jobs characterized as the "second-screen" - will not be a major deterrent in the growth of Intel’s new notebook class device known as the Ultrabook. That’s what Ben Arnold from analyst firm NPD Group said at the recent 2nd Screen Summit in New York, City last Thursday. This is good news for manufacturers who have had a tough time breaking into the tablet market, and apprehensive with concern that the iPad and the few successful contenders would begin cannibalizing notebook PC sales as they grow in popularity, and move into the mainstream.
Arnold reported that while some "PC tasks" are moving to the second screen including "video consumption," the tried and true heavy computing and "productivity tasks" remain firmly in the notebook PC camp where Ultrabooks are beginning to have an impact. To underscore the point, in its Retail Tracking report (just released June 28th) NPD Group said the low weight yet powerful and albeit pricey Ultrabooks are reinvigorating the Win notebook PC market overall.
Ultrabooks have already captured 11% of "…all $700+ Windows notebook sales at U.S. retail, through the first five months of 2012", the company reported last Thursday.
Perhaps more remarkable, even in these economic "recovery" times, the ASPs for the Ultrabook category have remained north of $900, ($927) rather on the high side of the Windows notebook market and those numbers are boosting the overall Windows notebook PC sales to almost 40% growth in the higher (>$900) price category (see chart.)
An "ultrabook" was defined (created) by Intel when the company announced the concept (supported by a development fund of $300M by Intel Capital) back in 2011. The new notebook devices are traditionally thin (< 0.8-inch) and use a new family of Intel mobile processor (Sandy Bridge or Ivy Bridge). They also have a solid state hard drive (SSD) and offer advanced features like a touch screen. The market initially saw the category as going head-to-head with the growing (traditionally ARM-based) tablet device, but that didn’t materialize.
One caveat on Ultrabook selling prices, ASP’s are beginning to erode a bit as NPD reported that in May the Win Notebook average selling price dipped below $900 for the first time to $885, and that number is probably going to continue to move south as we head into the competitive back-to-school sales season. The overall ASP for Win Notebooks is closer to $510, up $13 from 2011, as Ultrabooks gave the entire category a boost, NPD said.
Arnold said look for the soon-to-ship Windows 8 devices with an emphasis on touch screens to begin to usurp the smaller netbook market, particularly as ASPs continue to lower through increasing efficiencies and competitive price pressure in the Ultrabook category.
Suffice it to say that the battle that wasn’t-between the second-screen tablets and thin, sexy, touch enabled Ultrabook PCs will have game changing effects in other markets closer to home, particularly in the netbook PC space. - Steve Sechrist
(Note: For a broader discussion of smart devices and home entertainment, see our full Business & Strategic coverage in the July issue of Mobile Display Report.)