Ultrabook Shipping numbers Lower Than Expected.

Posted on 31 October 2011 By


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With late launches, a difficult economy and a lack of consumer awareness it would be no surprise if someone reported low shipping numbers. That report comes via Digitimes today.

Acer and Asus are reported to have shipped around 100k units each which, according to Digitimes data, is about 50% of expected shipment figures.

It’s somewhat difficult to get a handle on the number as availability is still tight across many regions. In Europe, for example, you’ll be lucky to find any Ultrabooks available for delivery. Is the low shipment number due to low customer demand or delays on production lines and marketing teams making final decisions around the world? When I met Toshiba Europe a few weeks ago they still didnt have a final decision on specifications.

It’s too early for a true picture but, I guess, never to early for a comment from Digitimes.

http://liliputing.com/2011/10/ultrabooks-off-to-a-slow-start-due-to-high-prices.html

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  1. #1 by Michael on October 31, 2011 - 23:20

    With such high prices, people aren’t interested. Shipping is one thing, people buying the units are another thing. I think the number may even go down to half if you consider that.

    Consumers are not stupid. Aesthetics alone cannot pull volume numbers. Apple can sell their MBA cause apple has a strong cult following. The PC market does not.

    Ultrabooks will, eventually, start selling wel once prices start to drop, and when I mean drop, I refer to the below $600 category.

    • #2 by Rinni on November 2, 2011 - 18:14

      In the Apple world MBA’s are the cheapest option, therefor they sell well.

      In the PC world ultrabooks are expensive option, therefor cheap laptops sale better.

      It’s all about price, not cult followings.

  2. #3 by Brian on November 1, 2011 - 00:11

    I disagree with Michael above. It’s not the high prices, it’s the quality issues that ASUS and Acer have had. I think it’ll get better when Toshiba, Lenovo, HP, Sony and Dell make their models available. Don’t expect HP, Sony and Dell this year though…

    • #4 by Michael on November 1, 2011 - 02:21

      I think when quality is concerned, Asus is No 1. Many agree to this. Dell and HP on the other hand, have a higher probability of getting spoilt.

      • #5 by Brian on November 1, 2011 - 11:04

        Not talking about Asus quality in general (I have two Asus 24″ monitors in front of me); I’m talking about the quality of the UX31 Ultrabook.

  3. #6 by thijs on November 1, 2011 - 08:47

    I guess holiday season is only starting to get going. And at least I am waiting for Lenovo to get to the market, see reviews of that one vs. Asus vs. Samsung vs. Toshiba etc,… and then I’ll make up my mind.

    • #7 by Adam on November 1, 2011 - 12:46

      The Lenovo’s looking pretty good; a little heftier than the others but the quick charge battery and at least advertised 8 hours looks good. Again the total value equation seems a bit lacking with a lack luster 1366×768 display, though. (Macbook Air cost machine but with a much lower quality and resolution display.)

      The Lenovo Ideapad U300 (non-S/non-ultrabook) looks great for the money at $750-$850 but a max 64GB SSD and the 6 hour only battery (not fast-charge) are the downsides.

      I still maintain that the total value prop is inhibited by two factors:
      1. CPU markup
      2. CPU perf vs. efficiency trade-offs are unbalanced towards perf

      Intel’s roadmap shows that they’re committed to better balancing the perf vs. efficiency trade-offs at least in Haswell and on and I have hope that competition from ARM will EVENTUALLY cause Intel to make the right decision and bring down the markup in the mobility-focused CPU SKUs, despite how investors might respond; it’s going to become a necessity.

      (I’ve never seen a better time to simply wait. The future looks much better for both the Mobility and Cost parts of the equation.)
      Heck, if gen 1 ultrabooks don’t start selling better, large inventories could positively impact the cost impacts way before Ivy Bridge or Haswell gets here.

      Adam

      • #8 by Chippy on November 1, 2011 - 13:17

        Good point on over-stock and prices Adam.

  4. #9 by Adam on November 1, 2011 - 13:07

    I think us Ultrabook/Ultramobility enthusiasts also need to follow closely the developments in the Intel Core-based “Slates”/”tablets”.

    Intel certainly seems to be looking to get Sandybridge (and eventually Ivybridge) low and ULV CPUs into both the Ultrabooks and very high-end “Slate” tablets. The pricing for both products are currently looking to be very premium and it really shows Intel’s real opinions of the segments and how they view them. (High-end product lines that they feel can/will justify 60% markups.)

    They’re alienating the mainstream mobility enthusiasts with this strategy a bit, IMO, and are certainly driving a large price point wedge in between ARM tablets and Intel-based tablets/slates. Seems almost like a major part of the strategy is supporting Win8 tablets and ULV parts as a whole new premium tablet category; only time will tell if Windows+ULV slates can be positioned as an ultra premium tablet product justifying TWICE the cost of an Ipad. (And that’s assuming that future Ipads don’t come down in price.) -It will be interesting to see whether this strategy is even possible within the Win8 time frame as Win8 will also be available on much cheaper ARM hardware so Intel justifying $1000-$1300 slates is going to be a much harder sell.

    If the “premium product, premium pricing” strategy pays off in the Slate arena, I don’t hold out any hope for seeing the markup coming down for ULV parts in the Ultrabook category; I think the fate of Ultrabook and Slate CPUs are closely tied.

    At this point, I hold out both equal hope that price and efficiency competition from ARM will force Intel to drop the 60% markup on the ULV and Low Voltage line AND that ARM will become fast enough to provide highly efficient and thin and cool “Ultrabooks” of their own.

    It’s Intel’s market to lose. They can hold onto those 60% profit margins with a death grip and watch market share erode and ARM catch up in perf, or they can keep people on the Intel train by bringing those CPU profit margins in closer alignment with the rest of the market.

    The future of mobility isn’t just about “fast enough” performance it’s about “cheap enough” price points for mass adoption; consumers are getting choices now and if the over all value doesn’t make sense it won’t sell.

    (Everyone keeps saying that “cool and sexy justifies the otherwise unjustifiable price”, but it’s insanely easy for ARM CPUs to end up in “cool and sexy” chassis, too.) -If that happens (and ARM perf catches up a bit) the Intel 60% markup is untenable.

    Adam

    • #10 by Chippy on November 1, 2011 - 13:24

      Adam. The 64 bit arm v9 processors will take 6 years to reach competitive Ultrabooks. Intel have time to improve their cores and get process sizes down without reducing margins in my opinion. It’s a shame for us. AMD in 2012 could be interesting though. I expect near-ultrabook cpu perfornance with better gpu performance for 20% less cost.

      • #11 by Adam on November 1, 2011 - 14:13

        Chippy,

        What are you expectations on perf to power consumption ratios out of AMD?

        It’s the balance between perf, power consumption, and price that makes great mobility-focused products.

        (I admit I haven’t looked at AMD as a competitor in the perf per watt arena for a long time so I’m way out of touch with their roadmap.)

        -Don’t forget that the last ultra mobile purchase for home use that I made was an Intel Core Solo machine, so I’m willing to give up some perf for thin, light, long-battery life, and reasonably priced. (It’s about “fast enough” and “cheap enough” for me; a Core i5 is complete overkill for surfing the web and writing a word doc. Having said that the ARM and even Atom CPUs of today aren’t quite there for me; I’m looking for something that occupies the happy middle ground between a “regular” CPU and ARM/atom today and I’m looking to pay somewhere between the two. (The middle ground perf chips from Intel are the MOST EXPENSIVE CPUs in their lineup.)

        The point of my probably poorly worded statement is that I have very little hope that Intel will lower the price point of the mobility-focused SKUs without a lowered cost competitor showing up and getting in the same perf ball park.

        Adam

        • #12 by Chippy on November 2, 2011 - 01:32

          I’m researching the AMD potential right now but there’s a lot of FUD out there right now.
          From the trustwortyh information i’ve read I estimate the following:

          CPU: 2.5x power of todays E-450
          GPU: As good as Ivy Bridge (Reasonable gaming power)
          Video: Hardware not quite competing with Intel but close.
          Battery life: Not as good as Intel. (-20% perhaps)
          Price: $100-$200 less than todays entry level Ultrabooks but Ivy Bridge Ultrabooks will come within $100.

          I think we’re looking at another Fusion success for AMD that will satisfy a lot of consumers – and really set the Ultrabook and ‘alternative’ market alight.

          Competition will drive some superb solutions for us all in 2H 2012

      • #13 by Adam on November 1, 2011 - 14:24

        I’ll also add that we’re still looking at near instant-on Win8 OSes on Intel hardware AND ARM (in the Win8 timeframe) AND the Microsoft app platform of the future for Win8 is HTML 5…

        -If you can run Windows and all “normal” apps on ARM, the expensive Intel ULV alternative is a niche for people who need to do high-end photo and video production.

        Again, if you can run Windows 8 and your apps on that $350 ARM tablet, why would the majority of people pay $1300 for an Intel Windows 8 tablet. (Especially when the lower power envelope of ARM means thinner, lighter, longer-battery life and sexier designs being possible.)

        -I don’t think ARM needs to compete with Intel on CPU performance at all. That’s the point; if it runs Windows and my apps, I don’t care about perf any more. I care about thin, light, battery life and coolness.

        Intel either figures out how to compete better on price or they feel the crunch, IMO.

        High perf gets regulated to the niche market sidelines in the app-focused world where the only perf spec is being able to run the apps that people care about. -Look at smart phones today; who cares about cell phone perf specs except for the geeks who are asking for 4.3″ and larger giant smart phones? -Regular people don’t care that their iPhone CPU isn’t as fast.

        The paradigm has shifted but Intel has not; “faster” is not going to be the primary driver of sales.

        $0.02,
        Adam

      • #14 by Adam on November 1, 2011 - 18:19

        The ARM roadmaps are also showing at 500% increase in performance every 12 months vs. a 200% increase every 18 months, which makes me think we’ll see perf parity way before 6 years in the future. http://blogs.nvidia.com/wp-content/uploads/2011/02/Tegra_MWC_Update1.jpg

        Adam

  5. #15 by OWS on November 1, 2011 - 13:16

    Occupy Intel!

    99% of the new Ultrabooks are being sold at prices that can only be afforded by the 1%!

    We need Ultrabooks with price points for the 99%.

    ;)

    • #16 by Chippy on November 1, 2011 - 13:18

      But its the 1% that is needed to fund the process change for the other 99%!

      • #17 by Motorcitymadhouse on November 2, 2011 - 04:21

        Not true, it all comes down to the 99% building the fab and running it. All the commodity materials transported, shipped and stored are done by the 99%. Most people are employed by small businesses run by people that are not part of the 1%, I know I had one. In many countries, the fab funds are made by the government which have collected from the 99%. Please keep these kind of topics off of this forum. Thank you.

      • #18 by Michael on November 2, 2011 - 07:00

        1% does not bring volume sales. For anything to do well or succeed, you need volume sales, so that, the company or the whole industry per se can benefit from economies or scale and lower prices eventually.

        When only a handful of people are buying ultrabooks, it goes to show that there is no volume sales. It is so low that any likelyhood of the sales gaining momentum also is not there.

        Why? Simple. You don’t need an economics degree to figure out. Its high prices. Chicken and egg story. Manufacturers need to sell it at lower prices and absorb the loss to gain market share, and then, maybe in a couple of years, reaping from the benefits of economies of scale, they can start to see profits.

  6. #19 by Dave on November 2, 2011 - 12:15

    Without touch support and the upcomming Windows 8. Why spend now so much money

    • #20 by Adam on November 2, 2011 - 12:39

      Good point, Dave. Yet another reason now might not be the best time to buy.

      (I really want to replace this old Acer Aspire Timeline 3810 of my wife’s as it runs too slow with AV on it, but I’m not seeing too many options except maybe the Toshiba Z830 or one of the “almost ultrabooks” right now. I hope I can hobble this thing along until Ivy Bridge and Win8 time frame.)

      -I still hold out hope that all of these reasons to wait lead to over supply and slashed prices on Ultrabooks in a couple of months and a reason to “pull the trigger”.

      Adam

  7. #21 by DavidC1 on November 4, 2011 - 13:03

    Adam:

    You and bunch of others are overestimating how much Intel really sells the chips for. Their ASPs in the mobile product line is around $100, even on the “performance” models.

    Think about it. Manufacturers like Dell and HP have systems that are pretty price competitive with systems that you have to go buy and assemble individually. There’s no way they can do that without Intel giving them discounts lower than what their official pricing indicates.

    http://www.investorvillage.com/mbthread.asp?mb=476&tid=10759150&showall=1

    -Performance Mobile: $118
    -Value Mobile: $42
    -Basic Mobile: $27

    Wanna point out ANY Intel chips that sells for $27? Or non-Atom chip that goes for $42?

    Yea. Think about it.

    Relying on pricing alone won’t win a battle. Otherwise AMD would have been doing so much better. Or Acer with all rock-bottom price strategy.

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