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GfK's Claire Decommer looks notebook market growth

GfK: Can ultrathins add value this Christmas?

Ultrathins have grown in excess of 300 per cent, despite total notebook declines. Claire Decommer, GfK account manager, IT, examines what that means for the market.

The retail sales figures published by the Office of National Statistics (ONS) in the aftermath of the London Olympics came as a major setback, with the event having failed to provide a much needed ‘boost’ to the UK retail sector.

In line with this overall trend, IT sales volumes in the UK consumer channels were flat year-on-year for the month of September 2012. While most product categories were in decline over this period, the trend was bucked by portable consumer devices, such as media tablets and e-readers, both of which were in significant growth. While the media tablets market grew by 140 per cent this September, the more traditional notebooks market was down 13 per cent over the same period. This highlights the fact that consumers are now opting for more mobile and compact devices.

Even though the notebooks market was in overall decline, the new and highly publicised ultrathin segment was up 407 per cent in volume terms when compared to September 2011. These new, stylish, light-weight and sleek devices have been the only major innovation in the notebooks market in recent times. In September 2012 alone, more than ten new ultrathins devices were launched. This further illustrates the importance of the increasingly portable side of computing devices and ties in well with the tablet phenomenon. As a result, manufacturers have made a lot of investment in order to promote these next generation devices and this has definitely contributed to the success of this category.

Ultrathins have thus been a key growth area within the notebooks market for the entirety of the previous quarter. The segment has had a major impact in weakening the declines in notebooks as a whole, especially when we look at it value terms. The Average Selling Price (ASP) of this segment stood at £845 in Q3 2012, while that for total notebooks was at £466 – a difference of almost half. This brings us to question as to how long this growth can be sustained for, given the current economic climate and consumer confidence.

Indeed, with the key Christmas and Boxing Day sales period just around the corner, the performance of the ultrathin segment would be a crucial factor as to whether the notebooks market will be in growth or decline for that quarter.

That said, this Christmas is going to be increasingly challenging, with media tablets quite likely to dominate the IT market as the key gifting product. As the number of media tablets sold in the UK reaches similar levels to notebooks, coupled with the upcoming launches of high profile, low ASP media tablets, this may cause a slowdown in the sales of notebooks and perhaps the more expensive ultrathin segment.

This is all the more true as the media tablet market is becoming a real eco- system with different price ranges, different screen sizes, and different purposes, such as those for children and gamers.

So only time will tell the true outcome of the fourth quarter this year, but one thing is for certain. If the ultrathins segment survives the Christmas and Boxing Day period, it can play an instrumental role in pushing the notebooks market into a much more reasonable position by the end of the year.

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