Making Sense of the Mobile Windows PC Mess

Given that large swaths of the channel are dependent on PC sales the current state of the PC industry is of more than passing concern for most solution providers.

With the rising popularity of the systems from Apple such as the Apple iPad and the MacBook Air more than a few solution providers are concerned that Intel and Advanced Micro Devices, along with Microsoft, have missed a major market opportunity from which they may never recover.

The Windows PC market’s initial response to the rise of Apple was a new class of “convertible” notebooks based on a new generation of Ultrabook processors. But sales of Ultrabooks, which are primarily aimed at competing with MacBook Air systems, have been relatively modest.

Now companies such as Hewlett-Packard are rolling out new Ultrabook systems, including a new EliteBook system for the business market. In addition, the range of Ultrabook systems now includes models with 14.-in and 15-in. screens in addition to the 12 and 13-in. screens that defined the initial Ultrabook systems.

Thanks in part to a $300 million investment fund created by Intel that drove down the price of Ultrabook system components, Ultrabooks are now more competitively. However, HP and others have also felt compelled to offer lower-priced, lighter weight notebook systems based on Intel Pentium and Advanced Micro Devices processors that basically serve the same function as an Ultrabook but use, for example, plastic parts rather than metal casings.

One of the reasons that Ultrabooks have not gained much traction, notes Roger Kay, president of the market research firm Endpoint Technology Associates, is that a lot of the mobile product category distinctions are artificial. People that buy a tablet are not likely to also buy a new notebook, especially one that offers many of the same basic capabilities.

In the meantime, the channel is still waiting for a new generation of tablets running Windows 8, which may only wind up cannibalizing the part of the Ultrabook market that the Apple has not already consumed. At the same time, Intel is planning to introduced a new Ultrabook design based on 22-nanometer 3rd generation Intel Core Duo processors, codenamed Ivy Bridge, that is due out this spring. Intel expects that Ultrabooks will carve out higher end space in the mobile computing market than the tablet.

But it remains to be seem to what degree those systems will wind up cannibalizing traditional notebooks. Theoretically, Ultrabooks are designed for use cases involving cloud services that require no hard drive versus notebooks that have hard drives that allow applications to run locally.

By this time most solution providers have figured out that things are a little more chaotic than usual in the PC market. In addition to competing with the Apple Mac Air system, the Apple iPad has taken a toll on notebook demand. Frank Gillett, a vice president and principal analyst with Forrester Research says that the company’s research shows about a 23 percent rate in deferral of notebook sales in favor of an Apple iPad. Gillett says that eventually those customers will upgrade their systems, but it’s not clear if they will upgrade to a notebook or shift towards a desktop PC or thin client device given the fact that they might not need two mobile computing platforms.

Turbulent times such as these are generally not good for the channel because in the face of a lot of chaos and confusion many customers will opt to wait to see how the market sorts itself out before making a choice or simply go with the Apple iPad until such time that PC vendors can convince them they have a credible alternative. At the rate things are heading, that may take a while longer than anybody in the channel is going to be particularly happy about.