Ultrabooks are selling well, driving up the cost of notebooks

Ultrabooks are thin notebooks with Intel Sandy Bridge or newer processors, decent battery life, and solid state storage for speedier performance than you get from hard drives.

They’re also a lot more expensive than the last big trend in ultraportable computers. Netbooks hit the market in 2007 with prices starting at $400. Today you can pick up a decent netbook for under $300.

But while netbooks focused on portability and power, ultrabooks are defined by portability and power. And features like high performance processors and solid state disks don’t come cheap.

Ultrabooks

When the first ultrabooks hit the streets in 2011 they were priced around $1000. There are some cheaper options now, with prices as low as $600. But it’s not likely we’ll ever see ultrabooks sold for netbook-like prices. They’re designed to do two things: drive up consumer expectations for what a portable laptop can do, and convince people that pricier laptops are worth the cost.

And it looks like it’s working.

Research firm NPD reports sales of notebooks priced at $700 or higher jumped from 12 percent of overall notebook sales during the first five months of 2011 to 14 percent in the first five months of 2012.

Notebook sales are down overall. They’ve fallen about 17 percent. But sales of notebooks that cost $700 or more fell just 3 percent, and sales of notebooks that cost $900 or more are actually up by 39 percent, according to NPD.

Not all of those expensive notebooks are ultrabooks. But NPD says that about 11 percent of the notebooks costing $700 or more that were sold in the first five months of 2012 were ultrabooks.

As reported recently, average price of a laptop is still reasonably low, at $510. But NPD says that’s about $13 higher than the average price a year ago.

I have mixed feelings about all this. On the one hand, there’s no denying that ultrabooks offer a better computing experience than netbooks (although it’s tough to compare a 4.5 pound, 15.6 inch notebook that technically fits into the ultrabook category with a 2.6 pound, 10 inch netbook).

But on the other hand, what initially excited me about netbooks were the low prices. Thin and light computers have been around for decades. But until 2007, ultraportables such as the Toshiba Libretto laptops always carried premium price tags.

What netbooks brought to the table was the idea that if size and weight were more important to you than high performance, you could find a laptop that met your needs for under $400.

Unfortunately, while that was great for consumers, it necessarily resulted in lower profits for PC makers and chip makers like Intel, which is a large part of the reason Intel is pushing the new ultrabook category.

I would be thrilled to see this new category succeed if I weren’t worried that it will only do so at the expense of cheap ultraportable laptops.

Dell, Lenovo, and Toshiba have already pretty much pulled out of the US netbook market. Since it doesn’t look like Microsoft will offer a low cost, “Starter” edition of Windows 8 for netbooks, I expect to see other companies follow suit once Windows 8 hits the streets later this year.

Low cost tablets are starting to fill the space once occupied by netbooks — but even if you pair a laptop-style docking station with an Android tablet, it’s still an Android tablet that can’t run desktop Windows-style apps.

On the other hand, I suppose folks that really want to run a desktop operating system on an inexpensive mobile laptop will always be able to hack together their own solutions. For instance, you can pick up a cheap Mini PC like the MK802 and a Motorola Lapdock for under $150 and make your own portable Linux-powered laptop.

via Laptop Magazine

  • Bruce

    These days I think Microsoft and the Windows laptop makers are more worried about Apple than OLPC. So we have Ultrabooks instead of Netbooks. I agree it’s too bad that they are paying less attention to low priced computing. You mentioned a Linux netbook recently, perhaps Linux can bring more life into low priced computers

    • CyberGusa

      There are multiple reasons for the present low interest in netbooks.

      Beginning with the lack of significant advancement in hardware over the last few years eliminates most of the reasons why people would want a newer netbook instead of continuing to use the one they likely already have.

      Then’s there’s the bloatware and cost cutting that continues to lower build quality. Along with there still being limitations imposed like any system coming with Windows 7 Starter Edition can only be sold with 1GB of RAM.

      While some companies have offered Linux systems over the years but they don’t ensure lower costs with lower number of total sales and stuff like bloatware exists to help offset the additional cost of Windows.

      Never mind the user base for linux is so fragmented among the literally hundred of different distros that any one distro release doesn’t appeal to all potential users. Like Ubuntu, there’s people who hate Unity and not everyone wants to customize each time they get a new system.

      While also what often happens is companies customize a distro and they often wind up making it worse in order to try to make it more appealing to laymen users.

      It doesn’t make matters any better that the present line of Intel ATOMs are using Imagination PowerVR based GMAs and those have never supported Linux very well at all.

      Even for Windows Intel has only released a less than fully developed 32bit Windows 7 driver for the Cedar Trail GMA and nothing better is expected until Windows 8 comes out.

      All this however is going to change next year when Intel returns the ATOM to their own GMA, rumored to be based on the Ivy Bridge HD4000, and the ATOM will finally get a major architectural update with the 22nm Silvermont.

      Along with the movement towards merging tablets with netbooks that’ll likely produce a whole new range of small and ultra portable solutions that’ll make them more useful than ever before.

      While competition will start to involve ARM, Intel, and even AMD as all three push for market share in the low end computing market.

      ARM will have Windows RT to start offering their alternative, and Intel will not only advance the ATOM next year but will also put it on a rapid advancement schedule that they’ve stated will be faster than Moore’s Law for the next few years. While AMD will start to also produce their own ultra low powered solutions and next years rumored 28nm “Tamesh” is suppose to be a 2W SoC that should finally let AMD produce their own competitive Tablets and other low powered devices.

      So it looks like things will turn around starting next year.

      For the remainder of this year, expect things to start to turn around after Windows 8 is released as then Intel should have better drivers available.

      While Windows 8 should have push to make 1366×768 standard instead of the existing 1024×600 that most netbooks are still using.

      We should start seeing more SSDs being offered as the next gen drives come down in price and start to offer better capacity.

      All along with a partial update in ATOM offerings with 1.7GHz N2650, 2GHz N2850, 32nm SoC Clover Trail will replace Oak Trail for ATOM based tablets, some Medfield options will also be offered for ARM like run times. While also we’ll be seeing more semi-mid range offerings of Pentium and Celeron processors for something between a netbook and regular laptops.

      So by end of the year we’ll at least see some change but we’ll have to wait till mid 2013 for the big changes…

      • Bruce

        “There are multiple reasons for the present low interest in netbooks.”

        Tablets, tablets, and tablets.

        “While Windows 8 should have push to make 1366×768 standard instead of the existing 1024×600 that most netbooks are still using.”

        With Android, fitting the OS to a 10 inch screen is not a problem.

        “So it looks like things will turn around…”

        If Google releases a Nexus clamshell tablet/keyboard running Android at a reasonable price, it’s over for Netbooks. The only thing keeping Google from doing this is complaints they would get from their Chrome OS project.

      • CyberGusa

        No, tablets may be popular for now and are taking the spot light along with Ultrabooks but the ones we have now are no netbook replacements and the sales figures are already slowing.

        While something like the Nexus 7 will likely give the sales figures a good spike but overall people are starting to realize the limitations of tablets and interest is slowly ebbing to more practical levels.

        For example, Android is no replacement for a desktop OS. It is a OS specifically designed to be a mobile OS that’s optimized for mobile usage and as such doesn’t work as well for productivity or desktop style usage.

        While even netbooks, which despite the name are basically just low cost and low powered mini-laptops, can be used for better productivity, able to run most legacy apps, along with being able to run all Linux distros and all versions Windows.

        Never mind hackintoshes and some who even thrown Android on them or use a service like Bluestacks.

        Sure you can run Linux on ARM but you’ll have to do it yourself and it’s not as easy to do as on a netbook, especially with less support on ARM when it comes to getting around closed drivers and even greater hardware fragmentation, and unless you’re using one of the top of the line ARM systems then it’ll run slower than on a netbook as ARM has only recently started to rival the ATOM for performance.

        Not to mention the issue of porting apps that are x86 optimized. Though easier than Windows because most Linux apps are self contained but is still another hurdle.

        While also you’ll likely have to do some of the work of the porting as up till now there hasn’t been that much effort to do so and some people are just waiting for a big name distro to offer itself like Ubuntu is suppose to be coming out maybe next year with maybe Android 5 for a combo release now that the Kernels have been re-merged and both can be run off the same Kernel now. Though it’s taking time because it’s not so simple to run two very different OS with only a Kernel in common and not for example get in each others ways.

        Also you’ll tend to pay more for tablets. Like for something that can be used like a netbook, like say the Asus Transformer Infinity, you’ll be paying over twice as much as you would for a netbook and no hard drive option for those who may need more than the up to 64GB offered by most tablets.

        While those tablets that do provide HDDs are either already full Windows PC Tablets, which are even more expensive, or are more or less just media devices.

        Another issue is ARM is still a 32bit processor. 64bit is coming but it will take time and will come first to the server market and will take years to come to the general consumer market. So forget about running 64bit software anytime soon unless you’re running a server.

        Mind also a lot of people carry both a laptop and a tablet because of the limitations I pointed out, among others as I’m actually trying not to make this too long.

        So there’s still a place for netbooks!

        While the push for x86 tablets is what may lead to a merger between Hybrids and what we now consider netbooks.

        Overall, it’s fine if you think a Android/ARM device solution will fit your needs, as it is good for mobile usages, but don’t kid yourself into thinking it’s a true netbook replacement and that there still isn’t room for netbooks and laptops in the market for those who want or need more.

  • peter

    Maybe people who usually buy more expensive notebooks still buy them while those who don’t just decided not to buy anything at all.

    I often see people who buy $1000+ notebooks tend to upgrade more often than those who go for the less expensive models instead.

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