IT is not that long ago that a notebook PC was considered purely and simply a business tool; a weapon for the road warrior who needed to slay his or her paperwork while on the move. It was a line of thinking driven by cost — portability was not always cheap, and the inability of because notebooks to compete with desktops in terms of processing power and graphics.
But that has all changed, partly because a growing number of forward thinking schools decided they should arm their students with mobile computers.
This, in turn, created a new generation of users that became accustomed to a laptop machine rather a desktop PC.
On top of this, major advances in technology enabled a family of notebooks to become genuine desktop replacements at desktop prices.
Up to the end of the last century you couldn’t play games or watch DVDs on a notebook; it cost a small fortune for something powerful enough to run graphic intensive applications.
Lightweight and ultra-slim meant sacrificing both processing power and functionality.
Today that is not as much of a problem but the market is more complex. Within a genuine and rapidly growing consumer segment there is a demand for both desktop replacements and new mobile entertainment systems that incorporate big screens with in-built digital television tuners and high-quality sound systems.
Now it is also common to see notebooks being used at LAN game fests because there is no longer a noticeable gap between desktop and laptop.
The education sector continues to grow — and change. Where robustness was once the main priority, schools are now looking for tough but lightweight and slim models. Lower prices and improved battery life (up to 11 hours rather than two) have sparked the interest of small to medium businesses that had previously not considered notebooks for mainstream computing.
And everybody appears enamoured with wireless — whether they use it or not.
Few technologies have had as big an impact as Centrino, which uses Intel’s first genuine mobile processor, the Pentium M (previously they were all converted desktop processors), and integrated wireless into the mainboard. It seems generally accepted among OEMs that Intel did a great job marketing Centrino.
Today, wireless is one of the main drivers of the notebook market — and its key competitor — the Smart Handheld Device (SHD).
According to IDC’s latest buying behaviour and trends report, which looks at the mobile computing environment, the enterprise market (250+ employees) for notebooks is about to experience a slight decline while spending on SHDs in the same space is about to jump markedly.
IDC market analyst, Michael Sager, said vendors would need to diversify their approach to the large enterprise space and look to push other mobile devices.
“There is growth for SHDs, and to a lesser extent Tablet PCs expected over the coming twelve months,” he said. “Another critical area for vendors and channel partners to examine is the potential for the sales of peripherals such as wireless keyboard and mice. The notebook market has grown faster than the planning for ergonomics.”
Sager said the top two areas for potential growth of notebook sales were education/healthcare and the combined manufacturing/resource/construction sector; however, the fact it was an election year meant minimal business for notebooks in the government outside of key tenders.
Not everybody is going to benefit from the growth in SHDs, with respondents to IDC’s survey indicating that while HP will maintain its market share Palm will lose favour to the competition.
Despite IDC’s predictions, PalmOne vice-president for Asia, Paul Blinkhorn, remains confident about the handheld market and, in particular, about the company’s relatively new Zire range.
He said it had attracted a lot of first time users, particularly multimedia enthusiasts, and had been incredibly successful, selling three million units worldwide in less than 18 months.
Blinkhorn said there was now a strong push to go beyond the personal information manager, particularly with wireless email, and a big opportunity for the channel in the enterprise market.
However, there are other indicators apart from the IDC report that suggest whatever happens with SHDs, the handheld market will continue to undergo a shake up and the PDA section of the market will struggle.
Products without wireless capabilities appear to be in for a tough time. Some vendors are already pulling out of the market.
Sony announced at the end of May that it was dropping its Clié range everywhere — except Japan — because it was no longer viable, while Toshiba, PalmOne and HP have all experienced declining sales internationally.
The big money for most of them remains in notebooks, and if the enterprise segment is slowing there are plenty of others that aren’t. Toshiba’s product manager for the volume value segment, Matt Codrington, said May was a record month for the company. Almost 23,000 units were sold.
This represented 100 per cent year-on-year growth.
Codrington predicted a a similar result for June.
He was particularly bullish about prospects for the SMB market where he was expecting massive growth.
Most other vendors shared this sentiment. This month, Toshiba will launch a new Tecra model with enhanced business tools that has been specifically designed for the SMB segment.
But Codrington said it was not the only sector with lots of potential. Education was booming as more schools adopted notebook policies and the consumer market was going well as increased performance and larger screens were allowing consumers to see mobile as a direct replacement for traditional desktop games machines.
He said the good news for the channel was that while falling prices and increased performance had spurred the market, prices had now stabilised and there was still a higher margin in notebooks (than desktops).
The consumer market, which is relatively new for notebook OEMs, is likely to get an added boost following Intel’s recent launch of three new second generation Mobile Pentium 4 processors and the Mobile Celeron processor, all of which are aimed at the desktop replacement and value segments.
While Celeron appears to be losing favour in the market, the same cannot be said for the Mobile Pentium 4.
The consumer market is proving lucrative for Sony which promotes the audio/visual capabilities of its Vaio range. Vaio product manager, Marcus Cornish, said the retail market has been particularly buoyant and had plenty of further potential.
However, he was cautious about the prospect of releasing the newly-announced Vaio U in Australia.
The U, which has been announced for the Japanese market, is a cross between an SHD and a notebook. However, unlike most SHD, it runs on a fully-fledged Windows XP operating system. It comes with a touch screen and a choice of 900MHz or 1GHz Pentium M processors but as yet doesn’t have any mobile phone capability — a key factor for success in the SHD space.
With the failure of the Clié still fresh in everybody’s memory, Sony is launching a feasibility study to see if the Australian market is ready for Vaio U.
In the meantime, the company is attempting to move the Vaio into the corporate market and has teamed up with Tech Pacific, MMT and IT Wholesale to help move into that vertical.
However, Cornish said existing channel partners would be protected and had nothing to fear from the new deal.
Meanwhile, spice has been added to the corporate market with the entry of Sun and its Tadpole range of SPARC and Pentium-based notebooks running Unix, Linux and Java applications.
While Sun claims there is a broad horizontal market for the products, software business manager for Australasia, Laurie Wong, said there were also some strong verticals with interest coming from government departments that wanted to use them as mobile servers for training in-the-field.
The security of Solaris-based systems also appealed to defence and other high security areas.
Wong said one of the main selling points was that because the products were Unix and Linux-based they were more secure and did not have the same vulnerability to blended threats as Windows-based systems
National sales manager for Alstom IT, Danny Harwood, said there was a lot of interest across the channel in the models. An advertising campaign was underway and an end-user demand campaign would begin in July.
With the strength of the current market everybody seems to be finding a spot and few if any are expecting any major weakening for some time.
The notebook is rapidly becoming the PC of choice in both office and home and is even giving rise to some interesting rivalry.
IBM PC division brand manager for A/NZ, Erin Mikan, said notebook envy was growing among private school students and their parents.
“We are seeing a lot of private schools forcing students to have notebooks and the education space has changed dramatically in recent years,” she said. “Where once everything was big and bulky, schools are now looking at the lightest possible models.
“As a result, students are ending up with better models than their parents and there have been cases of parents swapping the student’s notebooks for their own. The school sometimes has to step in and tell the parents to give them back because they don’t support the lesser models.”