Great Expectations

It was May 31, 2011 that Intel's newsroom quoted Executive Vice President Sean Maloney as saying that by the end of 2012, 40% of the consumer laptop market segment will encompass an emerging new breed of no-compromise computers, called Ultrabooks™.

It would be an understatement to say that Intel has been willing to put its money where its marketing mouth is leading. The company expedited the process of birthing that next evolutionary category of ultrathin-and-light laptops by stepping forward with $400-million in marketing support funds, and also by Intel arranging for original design manufactures (ODMs) to co-design and manufacture ready-to-sell ultrabooks to be badged and branded with names of small companies that would not otherwise be able to produce ultrabooks.

That $400-million effort includes the $100-million Intel Capital AppUpSM Fund to invest in companies making applications, digital content, middleware, and infrastructure. Intel is also in the process of applying an additional $300-million Ultrabook™ Fund for developing technologies, with touchscreen displays and tablet-like characteristics.

Industry Doubters, Doomsayers & Mockers

Speaking forebodings of impending calamity, numerous industry pundits and observers openly doubted, and some mocked, the 40% prediction. Some who should have known better interpreted the May 31st statement as meaning 40% of all laptops sold in 2012 would have to be ultrabooks in order for Intel's prediction to be correct. Others, feeling a bit more charitable perhaps, made it clear they thought Intel branded ultrabook sales would have to account for 40% of all laptops sold in the 4th-quarter of 2012 to validate Intel's prediction. Perhaps they should have read the statement more carefully.

Chicken Little Justified?

Adding fuel to the critics' presumptuously assumed fire, Intel has lowered its 3rd-quarter revenue outlook and issued the following statement: "Relative to the prior forecast, the company is seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory; softness in the enterprise PC market segment; and slowing emerging market demand. The data center business is meeting expectations."

Parsing Intel's 40% Prediction

Intel simply said that by the end of 2012, 40% of the consumer laptop market segment will encompass an emerging new breed of no-compromise computers, called Ultrabooks. There are enough caveats in that statement to fend off any amount of criticism.

A prediction of any book or audio recording topping the best seller charts would be true if the said subject became number-one on a best seller list for only one day within the specified time-frame. Time will tell, but it is well within the realm of possibility that ultrabooks will account for 40% of laptop sales for one day, one week, or one month before 2012 expires.

Using the word "encompass" also provides a loophole large enough for any politician, lawyer, or Executive Vice President to drive a truck through; loaded with ultrabooks of course.

Additionally, the statement did not indicate that the specified percentage applies to world-wide laptop sales, or only sales for a particular country or region.

To Kill a Mockingbird

Global Industry Analysts (GIA), a publisher of off-the-shelf market research, issued a report August 29, 2012, stating that: "Ultrabooks are expected to witness rapid adoption in the second half of 2012." The report continues: "Ultrabooks adoption has been increasing across the globe as the features offered by Ultrabooks rival that of tablet PCs, while retaining the robustness and productive features of regular notebooks. Ultrabooks represent a new growth vista for PC vendors. Ultrabooks are capable of competing directly with tablet PCs, and stem the slowdown in the PC market."

The report makes it clear that ultrabook sales will be "driven by the rich features offered in comparison to regular notebooks" and that price reductions appear to be mandatory in order to increase ultrabook sales.

This author dealt previously with upcoming ultrabook price reductions, with a List of Price Reduction Tactics, and in a press release: 7 Reasons Ultrabook Laptop Prices Will Plummet.

The Other Forties

Intel's CEO Paul Otellini said that laptop makers have 140 Ivy Bridge laptops in the design process, and 40 of those are touch-enabled, with more than ten being convertible hybrid laptop-tablets. Otellini told analysts: "Ultrabooks continued to build momentum, and achieved our volume goals for the first half."

2013 Laptops: The Great Expectations Sequel

In previous articles we've covered the fact that the ultrabook trend is on schedule, and is shaping up to be a tidal-wave of 2013 laptops. The ultrabook tidal-wave has started at the speed of molasses, but it will stick to the entire laptop ecosystem before the end of 2013.

Moore's Law

Intel has previously stated: "The Ultrabook™ will be shaped by Moore’s Law and silicon technology in the same way they have shaped the traditional PC for the past 40 years." "By the 2013 timeframe, we anticipate that market as a whole will have undergone the conversion, and that exceptionally thin, sleek, fast, secure, and robustly capable systems will be the new norm across the range of volume prices points."

Assessment

Intel branded ultrabooks, and thin-and-light ultrathins are simply the logical and inevitable extension of laptop form-factor design. Attempts to predict the exact month or quarter in which a 40% ultrabook market share will be achieved misses the point entirely. It is an easily predictable fact that the thin-and-light ultrabooks and ultrathins tidal-wave will cover the global laptop ecosystem.

The naysayers are puzzling to this journalist, because they seem to be puzzled by a PC design process which has "shaped the traditional PC for the past 40 years". Regarding the exact quarter in which that 40% ultrabooks' market share shall be achieved; the large and ominous caveat is the global economy.