Last year, all the PC pundits were convinced that the day of the desktop was over - notebooks and portables were making the clunking old PC a dinosaur. This suited many parties - the vendors, which make more money out of the premium-priced notebooks; much of the channel, since margins tend to be higher; those users who genuinely need to be on the move. But it did not necessarily suit the vast mass of users who still do most of their computing at their desk and want low prices and large screens and keyboards.
There has been a backlash, especially among small business buyers, in favour of the desktop, according to several recent research surveys, including one from Banner that. Sales of desktops are rising. But this balance may be tipped again with a rush of activity that promises to make notebooks more powerful than ever, and that brings the low cost network computer into the equation.
The Comdex show this month will see a host of new notebooks with capabilities approaching those of desktops, even in key areas where they have proved lacking so far. For instance, Toshiba will demonstrate a notebook with CD-Rom that operates at 10x rotational speed, the rate of a desktop PC drive.
Hitachi will position its new Mx Series notebook specifically as a desktop PC alternative. It will feature advanced multimedia and communications facilities including a 33.6Kbps cellular-ready modem with a 10Base-T Ethernet port. it also features infra-red communications for wireless data transfer. The product, codenamed Godzilla, will be the first notebook to use side-ported stereo speakers to increase sound quality, and it will offer advanced graphics and video support.
The units will not be for budget customers - dealers in the US expect to sell them for $4,000-5,000 from Christmas. However, notebooks are increasingly becoming the hi-tech end of the market, especially for multimedia.
One company that has been trying to convince its channels that notebooks will be its salvation is Apple, which announced a raft of portable models last week. It is fighting hard for its third place in the personal computer rankings, but Toshiba, in particular, is stealing its market share - according to Dataquest Toshiba doubled its shipments in the last quarter compared with the same period in 1995, jumping from number eight to number five in terms of world sales. This growth came from booming sales of its notebooks - a stunning feat given that notebooks still account for only one-fifth of the world?s total PC market.
Apple, for its part, saw its shipments in the same quarter tumble by 28 per cent. Various trends recently seem to mitigate against its desktop models providing it with the sales growth it now seeks - delays in the next release of its operating system and the increasing popularity of Windows - so it has been talking a lot about notebooks as the way forward.
But the launch last week of a revamped Newton handheld computer pointed to some of the problems that have frustrated Apple resellers in the past. Newton was technically advanced with its pen-based interface and handwriting recognition software, but sold only 50,000 units last year - a sign of technical and marketing over-reach, was the verdict of many.
The new version is targeted at a smaller niche, particularly white collar workers and education. There is a specific version for education - always one of Apple?s strong sectors - called the eMate 300 which costs $800 and will be sold only to schools, not to retailers. Many observers question the wisdom of clinging on to the Newton platform, especially with low cost network computers, and Microsoft?s ?lite? version of Windows for handhelds, likely to chip away at its base.
But the companies that will really benefit if notebooks revive against desktops and start to edge closer to 50 per cent market share are those in Taiwan. The country will eclipse Japan as the world?s leading manufacturer of notebooks this year, according to Taipei estimates published last week. Six of the companies will go public in the next few months to raise capital to extend production and next year the island will supply at least 40 per cent of the world?s notebooks.
While predictions that notebooks would make desktops redundant seem unlikely now, it is more likely that total PC sales will continue to rise, with notebooks booming in specific, and largely under-developed, application areas. The Internet and interactive multimedia applications are seen as a key growth market for notebooks - but here they will be under threat from the NC, which is designed primarily for Internet-based activities. These NCs need to be cheaper than the initial models launched in the past weeks by Sun and others, and they need to gain mass sales through a stable channel, but they will certainly change the makeup of the personal computer market yet again by the end of the decade.
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