Credit crunch drives UMD growth at desktops’ expense

Strong sales predicted for ultra mobile devices through 2008 as laptop sales slow and desktop revenues flatten

2008 will be a year where Ultra Mobile Devices (UMD) continue to build out their ecosystems and begin to establish themselves as the web-enabled device of choice compared with laptops and desktop PCs, according to research by In-Stat.

The analyst predicts that UMDs will likely exhibit a 72.6% sales growth in 2008. This compares with a predicted Mobile PC growth of 15.4% and a flattened desktop PC market which will pick up only in 2010. In addition, the firm say that non-computer makers are making plays by entering the mobile Internet space and are even labelling their products "UMDs."

In-Stat believes that the key driver for such growth of UMDs —defined as ultra mobile PCs, mobile Internet devices, a percentage of high-end smartphones, and a percentage of high-end personal media players—will be technology companies’ efforts to adjust to the macro-economic effects of tightened credit, flat wage growth, and job losses.  

However, before the growth will happen, there are key challenges for UMD manufacturers. "For UMDs, concerns remain in the areas of infrastructure and the availability of connectivity beyond Wi-Fi" says Ian Lao, In-Stat analyst.

Also of concern are the development of sustainable business models (whereby all levels of the ecosystem may make money without crushing the consumer with high prices); form factors that are conducive to, and align tightly with, specific usages; interfaces that are intuitive and provide pleasant, repeatable user experiences.

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