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In electronics, the next big thing is often the next smaller thing, with big-thing capabilities. For PC makers, that truism has manifested itself in the form of Ultrabooks—ultra-thin and lightweight notebook PCs with instant-on capability, all-day battery life and good performance benchmarks. It’s not the first time we’ve heard about Ultrabooks (Intel gave them a try in 2009 and is driving development this time as well), but the need is perhaps more obvious now. As the Apple iPad and other media tablets temporarily displace PC refresh cycles— particularly notebooks—more pressure is put on PC vendors to push the edges of its technology and know-how. Figure 1 illustrates the pattern of notebook hard drive shipments over the past decade.
FIGURE 1: Notebook Hard Disk Drive Shipments
The value proposition for Ultrabooks is that you can have the best of both worlds: a highly mobile consumption device like the iPad and a powerful creation device such as the PC.
From a storage perspective, we expect there to be two main types of Ultrabooks: 1) those with performance SSDs or Flash Cache Modules, and limited on-board capacity, and 2) those with performance SSDs and capacity-optimized HDDs fused together (known as hybrid drives). Another type of system (which is not a true Ultrabook) is thin and lightweight, uses cost-effective HDDs, but sacrifices some features, such as instant-on and battery life.
We expect Ultrabooks to help drive notebook growth starting in 2013, when ASPs can realistically hit the US$500 to US$799 price band—the industry’s volume sweet spot. Meanwhile, Intel is shooting for 40% of all consumer notebook sales to be Ultrabooks in Q4 CY12.1 While we view that goal as ambitious, we do expect modest adoption of Ultrabooks, particularly those with hybrid drives, and—at least initially—an even stronger pull for thin and lightweight notebooks, which also will be capable of hitting the popular US$500 to US$799 price band this year.
1Bank of America, Merrill Lynch, September 2011