Ben Bajarin is the Director of Consumer Technology Analysis and Research at Creative Strategies, Inc, a technology industry analysis and market intelligence firm located in Silicon Valley.
This week, I will join around 5,000 others who will head to San Francisco to attend Intel’s Developer Forum. For Intel and much of the PC industry this is a critical event. As of now, the PC industry has slowed to about a 5% per anum growth and it is desperately looking for something new to rejuvenate the market’s interest in PCs.
And the product that Intel hopes PC vendors and buyers will get excited about is something they call the UltraBook.
UltraBooks, if you’re not familiar with the term, are simply a name that’s been created to describe a super thin and super light computer. Intel’s hope with this category is that it will inject some new life and consumer interest into the non-Apple side of the PC industry. Several UltraBooks have already been announced. The most noteable ones are from Acer, Samsung and Toshiba.
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What I find extremely interesting is that Intel and partners feel that we need a new term to revitalize the PC category. This year alone we will ship somewhere between 380 and 400 million PCs. That’s no trivial number. The problem is that annual PC shipments are not growing at the rate they once were.
Other devices like smart phones and tablets are the areas of interest where rapid growth is taking place. Companies like Intel, AMD, Microsoft, Acer, Dell, HP / HP spinoff, etc. do not have strong product portfolios in these growth categories so if PC growth has stalled, it affects them greatly.
Tablets aren’t cannablizing PC sales yet. However, our research suggests that a growing group of consumers are starting to at least explore the question of whether they need to buy a new PC or just buy a tablet to use with their existing PC.
Apple on the other hand is outpacing the industry’s growth with Mac sales on a quarter by quarter basis. I anticipate their next quarter’s earning report to highlight massive sales of their newest MacBook Airs. In fact, in one or both of the next two quarters, I expect Apple to sell over 5 million Macs in just one quarter for the first time. The rest of the industry has caught on that Apple is on to something with the design of the MacBook Air and UltraBooks are what they plan to answer with.
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Ultimately the PC industry doesn’t need saving. PC’s are not going away. The problem is that most of the consumer interest and mindshare with PC’s lies with Apple. Are UltraBooks the answer and can they inject life back into the non-Apple side of the PC industry?
This is what we hope to find out at this week’s IDF. From what I’ve seen so far with UltraBooks, they still have a long way to go design-wise if anyone hopes to set one next to a MacBook Air and sway a customer. The design and experience with the MacBook Air is still superior to any UltraBook I’ve seen thus far.
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Hardware manufacturers, if they want to differentiate their UltraBooks from Apple’s MacBook Air, are going to need to step up their vision and design efforts. I fully expect to see a great deal of experimentation in UltraBook hardware design. We will most likely see UltraBooks that function more like tablets and have a detachable keyboard, perhaps like the Asus Transformer.
This kind of hardware experimentation is encouraging and I’m excited to see what new UltraBook hardware gets released this week at IDF. The challenge for UltraBook makers will be pricing their new hardware under the $1,000 mark that Intel has set as a goal. Toshiba’s new UltraBook starts at $999, but I’m skeptical that all UltraBooks will hit that low a price point.
I’m glad, for the sake of the industry and for consumers, that the challenge to create new and innovative hardware has been laid out with Intel’s new UltraBook campaign. Now we’ll just have to wait and see who steps up to the plate to innovate and differentiate themselves from the pack.
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Ben Bajarin is the Director of Consumer Technology Analysis and Research at Creative Strategies, Inc, a technology industry analysis and market intelligence firm located in Silicon Valley.