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Ultrabooks are doomed unless prices tumble

A minimum 25 per cent cut required, says analyst

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Ultrabooks are likely to be a flop with hard-up shoppers until prices fall by at least 25 per cent, market watcher Gartner has warned.

Reports today from the Far East indicate that early adoption rates of the nascent platform have fallen below expectations: Acer and Asustek are reported to have slashed orders with their manufacturers.

According to DigiTimes, the PC vendors cut initial orders, believed to be between 250,000 and 300,000, to somewhere between 150,000 and 180,000 units.

Acer would not directly comment on the reports but said its corporate policy was to "limit any liability related to stock". This follows the inventory debacle that cost the vendor millions of pounds in profits this year and strained relationships with kit-laden channel partners that refused to take additional shipments.

Antonello Fornara, EMEA product director at Acer, told The Reg it was still "testing the waters to understand the real market size and potential" but added that adoption in the early stages may not be wide scale due to the 13in screen size and pricing.

"It is not the most effective screen size, in future development there will be 15in screen size. With these specs and price points the market will take a different volume," he said.

Gartner research director Ranjit Atwal forecast shipments to be "very small" in 2011 and modest in 2012, "unless pricing falls by a substantial level - 25 per cent at least".

"The big unknown is pricing and what Windows 8 will bring to the party. We are less than optimistic about [ultrabook sales in] 2012," he said.

Earlier this week, analyst iSuppli claimed high prices would limit adoption but forecast that with this addressed, sales would account for 43 per cent of overall notebook shipments by 2015.

An even more aggressive estimate was made by Intel UK boss Graham Palmer, who reckoned ultrabooks could make up 40 per cent of consumer notebooks by the end of next year.

"The first products just started to appear in UK retailers," he said, adding that as the market develops a wider range of choice and price points will materialise. ®

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