Mid-range options booming in notebooks

Sager says the Australian notebook market attracted one new competitor every eight weeks in the third quarter of 2004. ASUS, BenQ, LG Electronics, Medion and Samsung had all thrown down their respective notebook gauntlets in the year, he says.

"[They] have all invested in local operations and have dramatically increased the competition for incumbent vendors," Sager says.

However, local boxmakers have yet to blossom, despite ongoing efforts by AMD and Intel to spark whitebox growth in Australia, he adds.

What is really working is rewritable DVD, which leapt 33 percent year-on-year, and two-spindle notebooks, which by third quarter 2004 saw year-on-year growth of 16 percent, compared with an 18 percent decline in three-spindle, desktop replacement-type notebooks, Sager says.

Lillian Tay, an analyst at Gartner, points to market share growth of 29.5 percent from 2003 to 2004 for Toshiba, 27.1 percent for HP, 57.5 percent for Dell and a whopping 85 percent increase year-on-year for Acer.

Gartner has also found that Intel’s Centrino marketing effort is paying off big time, with many users prepared to forgo genuine additional features -- such as DVD rewriters -- to have ‘Centrino technology’. "They’ll still buy it if it has Centrino," Tay says. "That’s quite funny."

Meanwhile, the entrance of Lenovo is not likely to change the notebook market’s fortunes significantly in the near term. The Chinese giant has promised to keep the ThinkPad tiller steady and it will be some time before it starts growing its total portfolio locally, Tay says.

Judi Lyddiard, product marketing manager at Toshiba, says most of the Japanese vendor’s notebooks -- especially in the Tecra range -- are now at the $2000 to $3000 mark, representing some 35 to 40 percent of client computing sales from all vendors.

"A couple of years ago, you were struggling to find any [notebooks] in that range," she says.
She says companies are definitely starting to buy again, and budgets are growing too, "and there’s nothing you can do with a desktop that you can’t now do with a notebook.

"A lot of companies out there are now actually encouraging people to work from home," she says. Broadband in the home and wireless on notebooks has really started to drive a trend.

Toshiba has started a new fleet management asset program that helps resellers make some money by helping them into asset management, data recovery, backup and security service provision, Lyddiard says.

Greg Hunt, ThinkPad brand manager at IBM, says some mid-priced notebooks have titanium/magnesium alloy casing that makes them tougher than previously. For desktop replacement, resellers can trade that off against other functionality, such as a wider screen.

Channel sales to SMBs are strong, with mid-range T-series and R-series models proving most popular. Hunt believes many SMBs are using desktops as a server-type box, and notebooks as client PCs. The move from 40GB to 60GB disks broadened notebooks’ appeal to smaller businesses.

"Notebooks also help them balance their work with their home life," he says. "You can work anywhere, any time."

Ergonomics have also improved across the mid-range. Notebooks in that category now having better designed screens and keyboards that are actually usable, Hunt suggests.

A spokesperson for TodayTech says the distributor recorded 100 percent growth in the past 12 months and expects growth to continue. "We offer 12 models of barebone notebooks. Our mid-range notebooks include the M375C, a 15.4-inch wide screen Centrino notebook and the [similar] M37EW with 128MB ATI Graphic accelerator," he says.

TodayTech is pushing multi-purpose notebook bags for resellers to bundle, and keyboards in different languages, such as Spanish, Chinese and French. The company also offers support and service for build-to-order notebooks with an integrated camera.

"Gradually, notebooks will be preferred over PCs, due to their size and mobile attributes," he adds. "With new Centrino platform Sonoma, more emphasis has been placed on digital home entertainment."

OEMs will get faster CPUs, better graphical capability and improved sound quality, he says.