Channel eyes ultrabook market for road warriors

As more vendors jump into the ultrabook market, VARs see frequent business travelers as potential customers. But ultrabook sales could eat into their traditional PC businesses.

Resellers expect customer demand for ultrabooks to pick up, but the lightweight notebooks’ low storage capacity and high price tag could prevent mass adoption.

The ultrabook class features products thinner and lighter than traditional notebooks. Other characteristics include solid-state disk drives for quick-boot capability and relatively long battery life. The question for channel companies is whether ultrabooks will play a role in the enterprise. Some executives are answering in the affirmative, identifying an organization’s frequent travelers as an initial ultrabook market.

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“We are planning to sell ultrabooks,” noted Mark Melvin, chief technology officer at ePlus Inc., a solution provider based in Herndon, Va. “We believe that a number of our customers will shift their laptop buys to ultrabook for road warriors who are looking for a powerful yet light and full-functioning notebook.”

Jessica Breich, senior manager of product and partner management at distributor CDW LLC, said it’s too early to gauge the enterprise ultrabook market, because most of the commercially oriented products won’t start shipping until later in the first half of the year.

“However, these products will be a great fit for anyone traveling or working in the field who wants a full-size screen -- bigger than 10.1 inches found in tablets -- and faster processing with capabilities for content creation,” she said.

Ultrabook market development

The initial wave of ultrabooks arrived late last year with Acer, Asus, Hewlett-Packard, Lenovo, LG, and Toshiba among the contributing product entrants. Intel is backing the category with both processor technology and investment dollars; the company has a $300 million ultrabook fund at the ready.

“You can tell it’s a huge initiative on the part of Intel,” said Jeff Davis, senior vice president of sales at D&H Distributing Co., a technology distributor based in Harrisburg, Pa. “They are going to invest a lot of money in the category.”

D&H last year ran an ultrabook demo for resellers, featuring such models as the Lenovo IdeaPad U300s, ASUS Zenbook UX21E, Acer Aspire S3 and Toshiba Z835. Ultrabooks are suited for people looking for “something thin and light to carry with the full functionality of a notebook,” Davis said.

More products are now hitting the market. Ultrabooks shipping or expected to ship this month include Dell’s XPS 13, HP’s Envy Spectre 14 and Lenovo’s IdeaPad U300e. An additional bevy of ultrabooks is slated to hit the market later this year.

Apple’s influence on the ultrabook market

The Intel-influenced ultrabooks are Windows 7 machines, but it was Apple’s MacBook Air that helped set the groundwork for the ultrabook market.

“MacBook Air ... has influenced manufacturers on the Windows side,” noted Michael Oh, founder of Tech Superpowers Inc., a Boston-based company that focuses on Apple sales, consulting and IT support.

MacBook Air launched in January 2008 and adopted solid-state flash drives in 2010. The latest generation, which debuted in July 2011, employs the Intel Core i5 and Core i7 dual-core technology that are common in the ultrabook market.

Ultrabook market pricing and adoption

While base models in the ultrabook category start at around $1,000, models with bigger screens and more robust configurations can run to $2,000. Pricing will initially concentrate enterprise sales among frequent travelers and executives seeking the latest technology, Davis said. He noted that buyers can purchase computers with more functionality, larger hard drives and longer battery life for less money than top-of-the-line ultrabooks.

“It’s still at a premium price point,” Davis said. “A year or two from now, I think we will see a very compelling product at a lower price point.”

Apple’s offering has been through a price transition. MacBook Air began life in 2008 as pricey, premium laptop, Oh said, noting that the first generation didn’t sell particularly well. The product cost $1,799 when it debuted. Early adopters and frequent travelers were the main purchasers. Today, MacBook Air is positioned as Apple’s entry-level laptop, occupying the space between the iPad and the 13-inch MacBook Pro. The price tag now starts at $999. As a result, “We have seen that audience become much broader,” Oh said.

While pricing sorts itself out, the super-thin notebooks face another issue: storage. Customers -- those with video requirements, for example -- might encounter capacity issues with solid-state drives, Davis said. Ultrabooks typically feature 128 GB of storage.

Oh cited the case of one customer, a business owner, who purchased a MacBook Air as his primary machine and struggled to fit everything he needed on the machine’s 128 GB drive.

But customers on the go may be willing to sacrifice some storage capacity for faster boot time and a thinner form factor, Davis said.

Ultrabooks’ role in mobile IT

The ultrabook offers yet another mobile device in a market replete with options. Netbooks have been in the market for about five years, and Apple kicked off the media tablet market with the iPad in 2010. Where will ultrabooks fit?

“We believe they will occupy two different niches,” Melvin said. “Many of the users may opt to carry a tablet for meetings and the ultrabook for when presentations and other heavy work is required.”

If ultrabooks take off, they “will eat more into the notebook business at the current price point,” Davis said. He said ultrabooks won’t affect tablets as much in light of the price delta between the two.

Breich also noted ultrabooks’ potential effect on notebooks.

“The ultrabook competes more with other notebook form factors and screen sizes,” she said. “While current models have a 13-inch screen size, there is speculation that commercial products will offer more mainstream sizes -- 14 to 15 inches -- later in the year.”

Channel companies seem prepared to monitor the ultrabook category as it evolves.

“I think it’s going to be a category to watch this year,” Davis said.

About the author
John Moore is a Syracuse, N.Y.-based freelance writer, reachable at jmwriter4@gmail.com

Let us know what you think about the story; email Leah Rosin at lrosin@techtarget.com, or follow us on twitter.

This was first published in April 2012
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