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2012 Demand Driver Seen in Ultrabook Expansions


With the end of 2011 approaching, it doesn't take many data points to realize that this has been a challenging year for most along the semiconductor and electronics supply chain.  We are still feeling the negative effects of  the shut downs and disruptions caused by first the devastating earthquake and tsunami in Japan in March and more recently the widespread flooding in Thailand which culminated in October.  Tablet PC, e-Readers and smartphones have been seen as detractors from the sales of traditional PCs.  The answer, as some have offered, is a "white knight" to reinvigorate demand for notebooks (see this recent report from CNNMoney).


Ultrabooks are seen by many, as holding just this demand driver rescue.  30 to 50 ultrabook models are expected to be showcased at the upcoming CES meeting.  Among these demonstrations, we are expecting a showcasing of both Intel's newest Ivy Bridge processors coupled with a preview of Microsoft's Windows 8 OS, as confirmed by these statements from CEA and Intel in EETimes.

There are already some ultrabook models on the market such as from Apple, Acer, Asus and Samsung, to name some of the early movers.  One reason the penetration thus far has been lighter than 2012 forecasts anticipate is because of pricing which has ranged above the US $1,000-mark.  The 2012 adoption of ultrabooks is expected to be fueled by price declines by 2H12 due to a significant increase in competition and decreases in NAND flash pricing (most ultrabooks are primarily SSD based and/or are hybrids), for example.  Also expected to fuel demand is the availability of features in ultrabooks that have mostly been the domain of tablet PCs rather than that of notebooks: low latency, increased battery life, quick start up/shut down, and new features such as removable touchscreens that can be used as a tablet (see this article for additional prototype discussions from Time Techland).

Forecasts are very strong for ultrabooks: "Ultrabooks will represent 43 percent of global notebook PC shipments in 2015, up from 2 percent in 2011 and 13 percent in 2012. Following their first year of shipments in 2011, Ultrabook penetration of the notebook market will increase rapidly, climbing to 28 percent in 2013 and then to 38 percent in 2014," according to iSuppli here.

This penetration rate would indeed provide the much needed revenue and growth for the PC sector.  If forecasts are even close, it would be the 'white knight' moment that is envisioned by analysts, such as here at iSuppli.  The interesting and positively impact of the ultrabook is that we forecast it to affect wide swaths of the semiconductor supply chain and 'reset' the industry track:

"With the introduction of the Ultrabook, the computing industry is poised for yet another paradigm shift. The technology now exists that actually could bring about a convergence of major mobile devices. If an attractive price point can be achieved and the consumer deems this a must-have product, the entire semiconductor manufacturing supply chain could rapidly reorient itself to serve the fast-growing Ultrabook market. Such an event could end the current slowdown in the semiconductor and electronics manufacturing industries." (cited here from iSuppli).

Let's hope this comes to pass.

Lisa Ann Cairns, Ph.D.
Written on Tuesday, 13 December 2011 08:42 by Lisa Ann Cairns, Ph.D.

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