Slim pickings at first for ultra-light laptops

The IT industry is already betting hundreds of millions of dollars on a new generation of laptops called "ultrabooks". But, there is no guarantee that they will sell.

Intel hopes that ultrabook sales will hit 136.5 million units by 2015 as users shift from laptops to these new gadgets. Justin Sullivan / Getty Images / AFP

The information technology (IT) industry is already betting hundreds of millions of dollars on a new generation of laptops called "ultrabooks". But after a poor reception last year for tablet computers running Microsoft software, there is no guarantee that ultrabooks will sell well this year.

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The chip-making giant Intel is focusing future production on microprocessors designed specifically for the new generation of ultrabooks. And major computer manufacturers are about to unveil the first of a new generation of portable computers that are far thinner and lighter than traditional laptops but have more power than low-priced lightweight netbooks. Intel believes the industry is moving away from laptops to ultrabooks.

"There is genuine excitement in the industry about this new category, and with expected sales volumes amounting to 42 per cent of notebook shipments, that is a huge opportunity for developers to update applications with new features," says Intel spokeswoman Shirley Chen.

Intel believes that last year's big IT hope, tablet computers built to compete with the Apple iPad, cannot fulfil current user expectations.

"Screens are still small, local storage is generally minuscule and restrictive, and tablets lack performance compared to that of a traditional PC," Ms Chen says.

Intel hopes that ultrabook sales will hit 136.5 million units by 2015. The chip maker has already committed US$300 million (Dh1.1 billion) to the Intel Capital Ultrabook Fund. The fund will, over the next three to four years, invest in companies building technologies to enhance the new ultrabooks. Electronics makers are also preparing to invest heavily in ultrabooks, with first-generation machines expected to be unveiled at the International Consumer Electronics Show (CES) taking place in the US this week.

"The ultrabook has the potential to kick-start the upgrade cycle that we have seen many consumers remove themselves from since the launch of the iPad … Industry optimism is unsurprising as vendors struggle to find a way to get people in developed markets to start buying PCs again," says Tim Coulling, an analyst at the research firm Canalys.

But the industry is also thought to be taking a huge gamble by investing so heavily in what will be high-priced and high-end products in a market that already has an expensive high-end super slim laptop in the Apple MacBook Air. Reports of a global double-dip recession have also fuelled industry fears that IT users will not be able to afford the new ultrabooks.

But, according to David Johnson, an analyst at Forrester Research, some manufacturers are in danger of pricing the ultrabooks too low. He concedes that the soon-to-be-released HP ultrabook has "everything the road warrior needs to get things done" and that it comes "in a lightweight, easy to carry package for a bargain price". But he adds he is disappointed there is no offering for demanding top-end users.

By economising on some high-end features, there is a risk of the first-generation ultrabooks falling short of the top end of the market while still appearing overpriced to most consumers. While personal users may be governed by price when selecting a new computer, business users are more prepared to pay for functionality.

According to the analyst group Piper Jaffray, corporate IT spending should grow by 4 to 5 per cent this year. This presents manufacturers with an opportunity to sell extremely slim, lightweight and high-performance laptops to professionals who would rather not carry around a traditional laptop weighing up to 3.6kg but whose work demands a powerful computer on which to run sophisticated organisational software.

In the current economic climate, however, status-conscious consumers or those with interests that require the processing power of a high-end laptop can already buy an ultra-slim lightweight high-performance Apple MacBook Air and may not be particularly interested in the offerings being unveiled at the CES this week.

But this is a path that the IT industry has trodden before. Apple has often pioneered a laptop only for manufacturers such as Samsung or Toshiba to quickly start shipping similar but lower-priced versions running on Microsoft software before starting to make improvements of their own. The market strategy of Intel and its manufacturing partners is therefore more long-term than it might appear.

The first Intel chips designed specifically for ultrabooks will come in the form of ultra-low-voltage processors aimed at conserving power and increasing the battery life of the first ultrabooks. But these will quickly be superseded by the Ivy Bridge processors that are designed to increase battery life even further while offering increased functionality. Intel's third-generation ultrabook processors, code-named Haswell, will take the trend even further. Together with long battery life, additional features are expected eventually to include 3D and touchscreen.

But although there is little doubt that users will inexorably shift towards ultra-slim, lightweight and high-powered laptops, they may not buy them in the volume the IT industry hopes this year.

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