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Ultrabooks to grow by 30% next year, says analyst

Posted: 05 Nov 2012 ?? ?Print Version ?Bookmark and Share

Keywords:ultrabook? SSD? Intel? Haswell? NAND flash?

According to DRAMeXchange, a research unit of TrendForce, as the cost decline of ultrabook components such as SSDs, displays and cases becomes more apparent next year and Intel places more focus on developing processors for ultrabook use. In fact, the market research firm predicted that ultrabook market size may exceed 30 million units next year, growing by more than 30 per cent compared to this year and accounting for 17 per cent of the notebook market.

This year has been the most challenging year PC vendors have seen in a while. With weak macroeconomic conditions and smartphones and tablets cannibalizing notebook demand, in addition to changing consumer attitudes regarding mobile device use, notebooks are no longer relied on as heavily as in the past. As Intel and other major manufacturers have lowered their shipment targets for 2012, TrendForce believes notebooks (including netbooks) will see negative growth for the first time in years, with total shipments forecast at 186 million units, a 4.6 per cent YoY decrease. Ultrabooks also fell far short of expectation this year.

TrendForce has adjusted the yearly ultrabook shipment forecast from 15 million down to 11 million, a mere 6.2 per cent of the notebook market. From a product perspective, the MacBook Air, with exceptional design and backed by Apple's unique brand image and component purchasing advantage, encompasses more than 40 per cent of the market. Limited by high component cost (metal case, thin display, SSD, etc.), other ultrabook manufacturers have been unable to bring cost and subsequently, retail price, down to the market sweet spot. Even if vendors change their strategy for H2 and adopt hybrid storage solutions (24GB or 32GB SSD paired with at least 500GB HDD) or use casing made of other materials to lower cost, the effect would be limited. Ultrabooks still would not meet expectation this year.

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Looking at the ultrabook market forecast for 2013, TrendForce believes the effect of declining component cost will be more noticeable next year. Taking SSD, for example, after three quarters of yield rate improvement, volume production of 20nm process SSD products will begin at the end of 1Q13. As yield rate continues to increase, SSD unit cost may see a 25-30 per cent reduction next year, which would contribute significantly to lowering high-end ultrabook cost (most use 128GB or 256GB pure SSD). Additionally, the majority of PC makers have set ultrabook price around $699. At this price, over 80 per cent of ultrabooks will use a hybrid storage solution. The 15-20 per cent cost savings would enable makers to set prices at $699 or lower, possibly to $599. Furthermore, at the latest Intel Developer Forum, Intel introduced Next Generation Form Factor (NGFF), its new SSD standard. Currently, mSATA SSD comes in varying specifications and sizes. Standardising SSD modules would lower developing costs for manufacturers, and TrendForce expects this move will significantly benefit NAND flash demand. Furthermore, Intel's Haswell microarchitecture and Shark Bay platform will launch in 2Q13.

Thus, although TrendForce forecasts the notebook market will only see 1.3 per cent growth next year, as netbooks will more or less be eliminated completely from the market and cannibalisation from smartphones and tablets will continue, the majority of notebook market growth will come from ultrabooks. As key component cost and overall cost structure improves and new processors arrive next year, ultrabooks may see a rebound after 2Q13. Therefore, TrendForce expects the ultrabook market to break 30 million units in 2013, taking 17 per cent of the notebook market.

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