Ultrabooks to take on tablets?

A report from IHS iSuppli states that ultrabooks will represent 43% of global notebook pc shipments in 2015, up from 2% in 2011 and 13% in 2012. According to IHS, following first year shipments in 2011, ultrabook penetration of the notebook market will increase rapidly, rising to 28% in 2013 and to 38% in 2014. Matthew Wilkins, principal analyst, compute platforms at IHS, said: "To compete with media tablets, notebook pcs must become sexier and more appealing to consumers. With media tablets having already reversed the expansion of the previously fast growing netbook platform, pc makers now are keenly aware that the notebook must evolve to maintain market growth and relevance. Enter the ultrabook, which borrows some of the form factor and user interface advantages of the media tablet to enhance the allure of the venerable notebook." While IHS believes that media tablets aren't expected to bring an end to the notebook market, it says that they are contributing to slowing growth in the segment. IHS forecasts a boom in the media tablet market, with worldwide shipments rising at a compound annual growth rate of more than 42% from 2011 to 2015. In comparison, it says notebook shipments will increase at a CAGR of 10% during the same period. Ultabooks are defined as notebooks that are extremely light and thin, at less than 0.8in in thickness. While ultrabooks employ a full pc operating system, the also add features commonly found in media tablets, such as instant on activation, always connected wireless links and solid state drives. Future ultrabooks are expected to employ convertible form factors and touch screens, allowing users to use the devices as either notebooks or tablets. According to IHS, the strongest ultrabook supporter is Intel, which plans to use its second generation Core microprocessors, along with Microsoft's upcoming Windows 8 operating system. The first Intel style ultrabooks are expected to be shipping by Christmas 2011, while Acer and Asustek are already selling the products. Intel has previewed its next generation of ultrabooks set for release in 2012 that will be based on the company's third generation Core microprocessor line, codenamed Ivy Bridge. Len Jelinek, research director and analyst, semiconductor manufacturing at IHS, believes that while Intel's support could be viewed as a reaction to the rise of tablets, the effort could set the stage for the revitalisation of the electronics supply chain. "With the introduction of the ultrabook, the computing industry is poised for yet another paradigm shift," said Jelinek. "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." According to Jelinek, this event could bring to an end the current slowdown in the semiconductor and electronics manufacturing industries. "In the age of the ultrabook, the demand for technology would not be limited to only a few companies," Jelinek said. "Ultrabooks require a comprehensive bill of materials, so companies focused on memory, logic and power management all would participate in the revitalisation of demand." One potential significant growth area could be in flash memory. The transition from the hard disk drives commonly used in notebooks to the solid state drives employed in ultrabooks would increase unit demand for flash memory while stabilising chip average selling prices. IHS believes that the benefits would not just be confined to chip manufacturers but also positively impact other supply chain participants, such as battery suppliers and electronics contract manufacturers.