Ultrabooks to sell better this year, but price still a challenge, analysts say

Intel-powered Windows 8 tablets will also need to have a lower price to compete in the market

Ultrabooks are expected to sell better this year, due to a larger selection of models slated to arrive on the market. But pricing and competition from tablets will continue to temper consumer interest in ultrabook devices, according to analysts.

Announced by Intel last May, ultrabooks are a new category of laptops designed to not only be thin and light, but feature fast turn-on times, long battery life, and high processing speeds. The devices have been priced from $800 and up. But on Wednesday Intel said consumers can expect ultrabook prices starting at $699 within several months during the back-to-school period.

Intel also revealed that 75 ultrabook models are currently in development, including hybrid devices that can turn into touchscreen tablets.

For users, this means they can expect to find ultrabooks designed for a larger range of groups including consumers, gamers and business users, said Antonio Wang, a senior research manager at research firm IDC. This contrasts with last year, when there were only about 10 ultrabook models on the market, he said.

"Now you will see ultrabooks with 11-inch screens to 15-inch screens, some on the low-end and some on the high-end for price," Wang added.

The lower price at $699, along with improved ultrabook features slated to come later to newer models this year, will also help drive more consumers to buy the devices, according to Wang. IDC projects 30 million to 40 million ultrabooks will be sold worldwide in 2012.

But the ultrabooks will still face competition from tablets, which better cater to users with lighter computing needs, Wang said. At the same time, the arrival of MIcrosoft's upcoming Window 8 OS will pave the way for notebooks using ARM-based processors to compete with Intel-backed ultrabooks, he added.

Pin-Chen Tang, an analyst with research firm Canalys, said Intel is clearly putting more resources into supporting ultrabooks by launching a massive marketing campaign to enhance the devices' visibility in retail outlets. But the ultrabook's success will ultimately come down to price, and even at $699, the devices will still be too costly for many mainstream consumers, he said.

To garner more consumer interest, Intel and ultrabook vendors will need to bring the starting price down to US$300 or $400, what some traditional laptops go for on the market, he said.

On Wednesday, Intel also said the company is working with 10 global and Chinese vendors to build tablets running Windows 8. Previously, the company's chips were used in tablets running Windows 7. But those products performed poorly in the market, according to Tang.

Even as Intel-powered Windows 8 tablets have the promise of extensive features, the devices will need to have an attractive low price to compete in the market. "Hopefully they will be even cheaper than the iPad," Tang said. "The iPad is the king of the industry right now."

Apple's new iPad starts at $499.

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