Intel-Based Ultrabooks Help Flagging Windows Notebook Sales

Despite the high prices, Ultrabooks are seeing rapid adoption among consumers and helping prop up a Windows notebook market that is seeing sales fall, the NPD Group says.

Ultrabooks, the very light and thin notebooks that Intel championed as alternatives to Apple€™s MacBook, are giving a boost to a struggling Windows laptop market, particularly in the high end, according to market research firm NPD Group.

Ultrabooks now account for 11 percent of sales of Windows notebooks that cost more than $700, NPD Group said in a June 28 report. The systems, which can run from $800 to well over $1,000, particularly helped shore up sagging Windows notebook sales in the premium space, the analysts said.

Overall sales of Windows notebooks fell 17 percent in the first five months of 2012. However, for systems priced at more than $700, the decline was only 3 percent, while sales of systems costing $900 or more jumped 39 percent.

Apple€™s popular MacBooks are notebooks starting at about $999.

€œUltrabooks have helped establish a market for more premium-priced Windows notebooks at retail,€ Stephen Baker, vice president of industry analysis at the NPD Group, said in a statement, noting that because of Ultrabook adoption, sales of $700-plus notebooks accounted for almost 14 percent of all Windows notebook sales so far this year, compared with 12 percent in 2011. €œConsumers continue to respond positively to finally be offered stylish thinner, and more premium device offerings than ever before within the Windows ecosystem.

That is good news for Intel executives, who a year ago introduced the idea of Ultrabooks, which are designed to offer the same productivity capabilities found in traditional notebooks while also including features€”such as long battery life, instant-on and eventually touch-screens€”found in tablets.

Analysts have said that Ultrabooks serve the dual purpose of helping Intel shore up flagging consumer PC sales€”which have been impacted by the increasing popularity of smartphones and tablets€”while giving the chip maker another pathway into the booming mobile device space. It also gives the company another tool in its growing competition with low-power chip designer ARM Holdings and its manufacturing partners, whose chips are found in most smartphones and tablets and who are looking to push the architecture into PCs and small, highly energy-efficient servers.

Intel has invested a lot of time and money into the Ultrabook effort, including creating a $300 million fund to help companies build hardware and software for the form factor and launching a massive marketing and advertising campaign that will run into the hundreds of millions of dollars.

Intel executives have said that 21 Ultrabooks based on their last-generation Sandy Bridge Core processors are on the market, but that most are still coming in with prices of $900 or more. However, the company expects more than 100 new systems to begin to launch this year powered by the current Ivy Bridge core processors, which offer greater performance and power efficiency and will help drive prices down under $700.

The falling prices, combined with upcoming features like touch-screens and convertible designs, should help drive Ultrabook adoption even more, according to NPD Group. Sales of the systems have been strong to this point, even though selling prices averaged $927 for most of 2012, dropping to $885 for the first time in May.

€œAs we head into the crucial back-to-school selling season, lower-cost Ultrabooks, some as low as $699, will be the hot form factor,€ NPD€™s Baker said. €œAs we look toward the fourth quarter, the expected launch of Windows 8, a wide variety of Ultrabooks with touch-screens, and convertible form factors should continue to make this class of product top-of-mind with the consumer as well as provide a much needed revenue boost to the entire PC ecosystem.€