Microsoft Is Looking Down the Barrel of This Gun

Notebook and PC vendors, who were hoping to cash in on a bonanza of PC replacements with the advent of Microsoft’s (NASDAQ:MSFT) Windows 8 and ultrabooks, are now looking at a very different reality.

Firstly, they fear that the cost of touch screens and the new Windows 8 software may be high enough to deter customers from replacing their hardware.

Secondly, with ultrabook prices still prohibitive for the average buyer, vendors are now having second thoughts about the demand that may actually emerge. They point out that prices of ultrabooks may not fall given that Intel (NASDAQ:INTC) is probably unwilling to cut processor prices and PC vendors are already under pricing pressures.

Yet a third problem, notebook touch screens running the new Windows 8 ‘shake’ with every touch input by the user. This implies that PC vendors would have to redesign panels into slide or rotatable formats, a factor that alone could depress demand well into 2013.