updated 09:10 am EST, Tue February 14, 2012
JPMorgan doubt on ultrabooks backed by sales
An investment note from JPMorgan analyst Mike Moskowitz on Tuesday downplaying the likely impact of Windows-based ultrabooks was backed by support from PC resellers. He saw most competitors pursuing the MacBook Air and going for "more of the same" in computers, largely trying to replicate what they'd seen before instead of trying something new. The emulation was ironic for an industry that had initially downplayed the Air, he said, although he saw there being a number of practical competitive issues as well.
Among the troubles were many of these companies having to fight for attention with smartphones and tablets, a 'good enough' mentality for PCs that saw them being updated less often, and the currently high prices needed to get into the ultrabook space. The usual need for solid-state drives, low-voltage but fast processors, and higher-quality materials like aluminum, carbon fiber, or fiberglass has meant that many now have to compete on Apple's pricing terms. Most of those skipping the Air were looking for "meaningful" price drops on the Windows side and were realizing they weren't possible yet.
Moskowitz was pessimistic that Intel would get to its hoped-for ratio of 40 percent of notebooks being ultrabooks by 2013. Lower prices as a general rule would have to wait until later in the year in this view, and the existing roster was unlikely to "jumpstart" notebook growth for 2012. Apple had seen a compound annual growth of 69.3 percent as of last summer where the overall industry had managed just 15.8 percent, and new models were more likely to be "noise" that were more likely to hurt other Windows PC builders than Apple.
Evidence of the the near-term troubles came from reports from stores to Digitimes. They expected existing ultrabooks to take a price hit of 20 to 30 percent in March and April to clear stock ahead of the Intel Ivy Bridge processor line due later in the spring. Acer's Aspire S3 and HP's Folio 13 had already taken price cuts in Taiwan that brought them down to as low as $850 for the S3.
Although price cuts are common near the end of a PC's lifecycle, most of these systems had only been unveiled at the end of 2011, giving them just a few months on shelves before they were being phased out. Apple has usually remained firm on pricing for virtually all of a computer's lifespan and hasn't altered its basic price points since introducing the second-generation Air design in fall 2010. [via AppleInsider]