The Notebook vs. Desktop Popularity Contest

[Geoffrey]

The Notebook vs. Desktop Popularity Contest
Wed Dec 18, 1:35 PM ET Add Business - NewsFactor to My Yahoo!


Masha Zager, www.NewsFactor.com

Notebook computers, once the preserve of the frequent flyer, have emerged in the last several years as a strong force in the overall PC market. Indeed, despite the recent downturn in corporate travel, notebooks' share of the market, in terms of the number of computers shipped, rose from 17 percent in 1999 to 25 percent in the third quarter of 2002, according to research firm IDC.



In absolute terms, the number of notebooks shipped rose 18 percent in the third quarter of 2002 compared with the year-ago period, while shipments of desktop computers increased just 5 percent in the same time span.


Doing More for Less


The major reason for the increasing popularity of notebook computers is their rapid decline in price, IDC research analyst Alan Promisel told NewsFactor. Notebook prices have fallen to an average of US$1500 from about $3000 three years ago. Holiday-season deals can even be found for as little as $800.


At the same time, performance has increased dramatically. Whereas notebooks traditionally have been slow and clunky, today's models resemble desktop computers in terms of hard drive speed and capacity, processor speed and graphics capability. "There's still a technology gap," Promisel said, "but it's been greatly reduced."


Second Computers


Much of the growth in demand, according to Promisel, has occurred in the consumer market. Though consumers are still less likely than corporations to buy notebooks -- they account for 37 percent of the desktop market but just 28 percent of the notebook one -- they are more influenced by price tags than corporate buyers and have responded more enthusiastically to falling prices.


In addition, according to Jed Kolko, a senior analyst at Forrester Research (Nasdaq: FORR - news), the market has changed now that more consumers are buying second computers for their homes. Although consumers -- with the exception of students -- overwhelmingly choose a desktop PC as their first household computer, they are more likely to consider a laptop when shopping for a second computer.


Wireless Lifestyle


Also, with wireless network prices falling, consumers are beginning to install mobile networks in their homes, so they can have broadband access via multiple computers. This move could spur sales of notebook computers, according to Kolko, because users will discover they can access the Internet from anywhere in the home.




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Yet another incentive for consumers is that a mobile lifestyle is becoming possible as wireless "hot spots" crop up in Starbucks (Nasdaq: SBUX - news) coffee shops and public parks, and as plugging into the Internet from anywhere becomes easy. "The consumer laptop has a more stylish image now, like a cell phone or PDA," Promisel noted.


Corporations also are finding more uses for notebook computers, according to Promisel. The corporate market is no longer limited to executives and salespeople who spend their lives on airplanes; many professionals are using notebooks to take work home or to take notes at meetings.


Desktop Replacements


So-called "desktop-replacement" notebooks have attracted a great deal of buyer interest over the last few quarters, according to IDC. However, Forrester's Kolko said, "'Desktop replacement' is more of a marketing term than the way consumers see it. The consumer often has a desktop at home already, so they don't need a replacement. 'Desktop replacement' is often a euphemism for 'heavy.'"


These larger, heavier notebook computers are selling well, according to Kolko, not because they replace desktops but because they cost less than thinner, lighter notebooks. After all, much of the cost differential of notebook computers stems from the need to produce components that are light and easily portable.


DR Drawbacks


Desktop replacements have their drawbacks, however, and not all consumers who have bought them have been happy with them. They typically use up their batteries in less than two hours, compared with three or four hours for standard laptops. Some of them, especially those that use CPUs designed for desktop computers, also tend to overheat.


In fact, IDC's Promisel noted that desktop-replacement computers have been plagued by a high level of consumer complaints and returns. In one publicized case, owners of Toshiba Satellite laptops filed a class-action lawsuit in July 2002, alleging that the computers overheated and shut down. Toshiba issued software patches to address the problem; however, according to the plaintiffs' attorneys, the patches "slowed down the computers' processing speed to substantially lower than advertised levels." Toshiba has since released new models of the Satellite that appear not to have the same problems.

Tablet PCs

A new twist in the notebook world is the arrival of tablet, or pen-based, PCs. Although these devices have come and gone several times in the history of notebook computing, Microsoft (Nasdaq: MSFT - news) launched a new wave with its release of Windows XP (news - web sites) Tablet PC Edition in November. Since then, six companies have announced tablet PCs and many more have licensed Microsoft's software. Some of the tablet PCs are solely pen-based, while others allow users to switch between pen and keyboard use.

Kolko said he believes tablet PCs will appeal primarily to enterprises. "Mobile workers will use them -- salespeople, people on the shop floor, maybe also some students -- but they won't be a major consumer item," he noted.

"Tablets will replace other notebook computers," IDC's Promisel predicted. "They don't create new mobile users, just provide them with an alternative to the standard notebook form factor. But they will create a buzz in the market and more attention to the mobile space in general."

[Manu]

Interesting article.

I think another factor they haven't mentioned is that software requirements have stalled (effectively) while hardware has acclerated forward.

Before, performance woes of a notebook were compounded by software that demanded a lot. (98 can run only so well on a 400Mhz machine, let alone a 400Mhz laptop) However, now we're looking at 1.6GHz+ machines for OS/software that runs decently on 400MHz desktops.

Further, we're looking at the quality of the displays. Laptop monitors used to suck HARD but now they are pretty darn good.

Same with graphics cards.

Though, I gotta say, I was using my Dad's 1800+ and you just can't compare it at all.

Laptops need better bus speed and faster HDs.

[Squalo]

i'm pretty happy with my laptop, especially when i take it places and i have everything on my computer that i'm used to. I've used it at work (cocktail hour entertainment at parties) and it was nice to not haul a desktop and a crt monitor. i do wish that laptops could be comparible to desktops in terms of speed, memory, and price, but i feel i got a great deal on my laptop and i do enjoy it very much.