MacBook Air set to decimate Ultrabook market says J.P. Morgan

Chris Burns - Dec 12, 2011, 1:10pm CST
MacBook Air set to decimate Ultrabook market says J.P. Morgan

In an investor’s note released this week by J.P. Morgan, they made it clear that they believe the Ultrabook market will continue to be dominated by Apple’s ultra-thin MacBook Air well into next year at least, saying the prices on all competitors don’t begin to post a threat to the thinnest Mac on the market. While most Ultrabooks, they note, are priced up and above $1000, with only a few sitting below that mark, the MacBook Air still has a major edge over any competitor already released or released in early 2012. At prices between $999 and $1,599 for the newest model and competing Windows-based machines not nearly as pretty or perfect, you’d better bet your lunch he’s right.

Analyst Mark Moskowitz, Executive Director at J.P. Morgan, spoke on how even though the MacBook Air isn’t the cheapest laptop on the market – not by a long shot – its form factor and early launch into what the competitors have called the “Ultrabook Market” will continue to attract users of all breeds. The threat comes from a future where price is such a factor that Apple will have to drop. Until that happens, there’s just no killing what cannot be killed. As Moskowitz said this week:

“Ultrabooks are not a competitive threat, yet. In general, we think that ultrabooks are highly discretionary devices, and pricing on competitive offerings must fall below $800 before posing a viable threat to Apple’s MacBook Air. In our view, emerging markets have not been a big contributor to MacBook Air results thus far given the pricing premium on the product. However, we expect this to change as pricing on the MacBook Air decreases over time. Also, as the iPhone and iPad continue to penetrate emerging markets worldwide, we expect the Apple halo effect and Apple ecosystem to drive incremental Mac sales worldwide, including the MacBook Air.” – Moskowitz

Does this happen to you? Do you get halo’d in your love for the big Apple ecosystem that’s forever expanding and embracing us all? Inside the USA and the region containing Europe, Middle East, and Africa, aka EMEA, are accounting for a total of 73.9 percent of all units sold around the world. In China, on the other hand, the third quarter of this year proved to be a big one for Apple’s MacBook Air, with sales of units growing 339 percent over the same quarter last year – this compared with 76.5 percent growth in the same period for all other Mac models.

In other words, its not just the competition outside of Apple that’s not keeping up – people want the thinnest notebook from the company best known for bringing such a product to the market. Apple’s made a notebook here that looks and feels the part of the king of its category, and compared to the rest, J.P. Morgan says its the best.

“In contrast, we think that the first round of ultrabook offerings lacks the right blend of features and attractive price points to grab market share from Apple.” – Moskowitz

[via Cnet]


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18 Responses to MacBook Air set to decimate Ultrabook market says J.P. Morgan

  1. I actually agree with this 100%. This was a pretty objective article. No one can argue that this site is always slated against Apple anymore. It just states the facts. 

      • Haha, no I actually really liked the article. I love MacBooks. There really isn’t another laptop that can compete with specs and design for that price point. I’ve looked long and hard. I don’t particularly like Apple..but they are king right now and no one seems to be doing anything about it. Even with Android devices they only tote specs as if the experience doesn’t mean a thing. 

        • Experience counts but so do other things like having choices and actual performance where it counts.  While specs usually also effect the experience and can be a significant factor if the difference is large enough to overcome any shortcomings of the software.  To some extent even Apple brags about specs, like the difference between the iPhone 4 and 4S for example.  While Android has continuously improved and is hardly as problematic as it once was.

          You just can’t expect change overnight however, but we’re only months away from substantial improvements in Ultrabooks and another big update in 2013 and again in 2014. So the competition will be rapidly ramping up.

          Besides, many of the companies comping out with Ultrabooks right now have no previous experience making Ultra Thin & Light laptops.  So it takes time for them to learn how to properly design them, establish the manufacturing for mass production, and acquiring the resources they need.

          Mind Apple already owns or rents most of the worlds aluminum milling machines.  So lots of these companies have to resort to either alternate materials or get the machines they need by starting from scratch and building their own.

          However, Intel is helping with a lot of the investment costs and they should have all that squared away before the end of next year.  Freeing those companies up to focus on producing the most competitive product and not have to worry about making back their R&D costs.

          Meanwhile, pricing is already expected to go down $200-$300 by the time the Ivy Bridge based systems start coming out in the later half of 2012.  So it remains to be seen if the MBA can hold its lead to the end of 2012.

          While support for both Android and touch friendly Windows 8 in 2013 stands to make PC Ultrabooks with touch screens stand apart from the MBA.

  2. I did a double-take on the headline. It still seems off. “Decimate” seems to infer that thanks to the MacBook Air there will no longer be an ultrabook market or the market will only be a shadow of what it once was. I would agree that the MacBook Air decimated the *netbook* market by proving that small clamshells don’t need to be anemic. I would also agree that MacBook Air stands poised to *dominate* the ultrabook market it created

    • Netbook market wasn’t effected by the MBA, different market segments for one thing with the whole PC vs Mac and the 4x price difference of course, and the MBA also didn’t create the Ultrabook market.  Ultra Thin & Light laptops have been around longer than the MBA.  The MBA just proved it can be more than a niche product but it took two tries.  People forget the first MBA was a failure.

      Whether the MBA will dominate is questionable at this point.  It all depends how quickly the market develops and Ultrabooks improve over the next year or so.

  3. I guess all we can do is to wait for 2012 and 2013. If pricing is 30% to 50% cheaper then I bet people would go for Ultrabook instead.

  4. I am going to go out on the limb here and say he is wrong.  One thing that Ultrabooks come with that the Macbook air doesn’t is Windows.  Windows accounts for over 90% of the OS market share.  

    • I’ve noticed a lot of people using Bootcamp to run a Windows OS on Macbook hardware. Invariably they describe mac laptops as the best Windows laptops they’ve ever owned.

      • my boss is constantly cursing at his mac while it runs bootcamp.  it’s not necessarily the most ideal solution for everyone.

      • Macbook hardware? Really? Hardware, that’s identical to and often out-spec’d by what you find on most high end Windows laptops/ultrabooks (depending on category)? The only upper hand the Macbook has over most Windows laptops is build quality, and even that has been mooted by the Samsung Series 9 and the Asus Zenbook!

        If the people you meet “invariably” describe Macbooks as the best Windows laptops they’ve ever owned, they’re probably stuck in the past & need to look again!

  5. Can we please stop following Intel PR bullshit? These are just Ultraportables that are really thin, nothing more.

    These notebooks did not require a new category.

    • I would like you to find me a Netbook that has the capable hardware and that it is as light and thin as an Ultrabook. 

      •  A Netbook is NOT an Ultraportable. A netbook is a netbook. An Ultraportable encapsulates the “Ultrabook” category and then some. The Toshiba Portege is an Ultraportable despite the fact that is has an optical drive as well as a full-clock CPU. The Sony Vaio Z is an Ultraportable. The X1 is an Ultraportable (NOT an Ultrabook), the Series 9 from Samsung is an Ultraportable.

        An Ultraportable is just a laptop that is thin, light and *usually* uses an ULV CPU or some kind, but it doesn’t have to. It can also use a full-clock CPU such as the Portege, the X220, the X1 or the Vaio Z.

        This “Ultrabook” category is complete and utter nonsense and is totally unnecessary as a category.

  6. there are tons of people who want portability but who just will not use a mac.  ultrabooks will do fine.

  7. Well Moragan is an American and Apple is a going down Amreican Corporation. So every American fools must collectively sell nuts and lies to prop up Apple. But then again do you see the guy next to you toting an Apple. The only guy I know near to me toting an Apple is there be any is a “FOOL” or a “PROSTITUTE” either way both are “FOOLS”

  8. Lets put it this way. I didn’t buy a PC just because it look better in hardware/price. I buy it because it has better support from community and developer alike. When a Mac broke down, you are screwed. Majority of hardware and software out there are made for PC.

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