Since the arrival of Windows 8 in October 2012, the notebook industry has been adopting touchscreens at an alarming rate.  In fact, touch-enabled notebooks now account for 56% of total notebook placements in the US retail channel.  What a difference a year-and-a-half makes!

Acer and Asus embraced touch functionality faster than any other manufacturers and claimed first-mover advantage.  However, since touchscreen panel production capacities were low, the costs made the first wave of touchscreen laptops very expensive.  The prohibitive prices, in addition to negative reaction to Windows 8’s new interface, made for weak sales, which negatively impacted the early adopters.  In an earnings call, CEO Jason Chen attributed the company’s recent losses to investing too early in touchscreens and Ultrabooks, admitting that Acer “took the initiative more aggressively than anybody else, to the point where we got hurt.”

Over the last year, panel costs have come down dramatically and more manufacturers have devoted significant portions of their retail assortments to touch-enabled models.  In September, in particular, HP took advantage of lower panel costs and released a wave of low-cost Pavilion TouchSmart configurations throughout the retail channel, which caught Acer and others flat-footed.  Using our handy new PowerPivot tool, we can see how dramatic that shift was.

HP now has 35% shelf share in the touchscreen notebook market, up from 8% just a year ago.  Consumers are beginning to view touchscreens as a standard feature, rather than a luxury, and pricing has followed suit.  For some configurations, the cost of upgrading to a touchscreen has declined from over $100 to less than $50.  Over the last several months, HP has brought touchscreens to even its entry-level offerings including its new 15 TouchSmart series, which has been advertised for prices as low as $369 (Staples) and $379 (Best Buy).

While the weak economy makes it hard to justify buying a high-priced Ultrabook, more affordable touchscreen laptops are now the norm and will be especially visible during the upcoming back-to-school selling season.  Even long-time holdouts like Chromebooks and large 17-inch laptops are beginning to adopt touch functionality, making the non-touch models look like outliers.  As tablets grow in popularity, prices come down, and new touch technologies emerge, manufacturers may find it hard to justify not including a touchscreen in their future notebooks.