October 11, 2012 – High pricing and ineffective marketing, in a consumer market fighting for attention against hot-selling mobile devices, are weighing down expectations for ultrabook demand — but the future’s still bright with new models promising more tablet- and smartphone-like features.

IHS iSuppli has slashed its estimates for 2012 ultrabook shipments to 10.3M units (with hopes of half of them coming in 4Q12), down from 22M units earlier this year. The firm also has lowered its outlook for 2013 ultrabook shipments, to 44M units from 61M units. (Part of this forecast-lowering is a classification issue: Intel’s rigid definition of what qualifies as an "ultrabook" has redefined many notebooks as "ultrathins," iSuppli notes.)

1Q12	2Q12	3Q12	4Q12	1Q13	2Q13	3Q13	4Q13
714	1,540	2,692	5,392	8,752	9,806	11,473	14,297

Forecasted global ultrabook unit shipments, in thousands of units. (Source: IHS iSuppli)

So far, the PC industry has failed to create the kind of buzz and excitement among consumers that is required to propel ultrabooks into the mainstream," noted Craig Stice, senior principal analyst for compute platforms at IHS. "This is especially a problem amid all the hype surrounding media tablets and smartphones."

The other sticking point for ultrabooks: pricing. Systems need to get from today’s ~$1000 levels to below the $600 threshold to achieve mainstream-friendly volumes. Ramping up sales for 2013 especially will depend on this, while also incorporating the new Windows 8 operating system as well as attractive features (read: expected by consumers) such as touchscreens. If they don’t, they’ll continue to face an uphill battle, in a persistently languishing economy against a growing roster of lower-priced tablets and smartphones (iPhone 5, Kindle Fire HD, forthcoming Microsoft Surface).

Intel seems to be focusing its attention on the mid-2013 introduction of its Haswell chip, which it hopes will "catalyze[e] the ultrabook revolution" with improved performance, lower power consumption, security features, and support for multiple displays and high-definition monitors, iSuppli notes. At the recent Intel Developer Forum, the chipmaking giant reportedly mapped out 40 ultrabook designs in progress with touchscreens, and showed survey results indicating consumers prefer touchscreens 80% of the time. Ultrabooks with convertible form factors — e.g. with a detachable touchscreen, usable either as a traditional clamshell laptop or as a tablet — offer the best of both worlds.

Ultrabooks: Key market for motions sensors

One component sector that’s counting on that ultrabook demand to materialize is motion sensors. Various accelerometers, gyroscopes and compasses will be required to deliver the new features promised in new ultrabooks, from gaming to indoor navigation to augmented reality. IHS iSuppli projects an eye-popping 14-fold growth for motion sensor sales over the next four years to $117.3M, up from just $8.3M in 2012 — that’s a 93% CAGR. Before ultrabooks, the only motion sensors found in notebooks were accelerometers used to identify if the unit was dropped, to trigger protection of the hard-disk drive’s read/write head. With more solid-state devices (SSD) being used in notebooks, that functionality isn’t needed, notes iSuppli.

But the new ultrabooks do use accelerometers for functions such as auto screen rotation, and will employ compasses and gyroscopes to detect direction and motion — functions already common in games for tablets and smartphones. While Intel had originally asserted that it wouldn’t make sense to incorporate such motion sensors into conventional ultrabooks, the planned future convertible/detachable ultrabook models will indeed require them, points out Jérémie Bouchaud, director and senior principal analyst for MEMS and sensors at IHS. And that’s the kind of assured end market that component suppliers need.

2011	2012	2013	2014	2015	2016
0.4	8.3	32.8	60.2	92.3	117.3

 Forecast of global motion sensor revenues in ultrabooks. (Source: IHS iSuppli)