Slimmer, thinner, faster…cheaper!

2 Mar 2006

Notebook PC shipments in the last quarter grew by almost 60pc year on year and manufacturers such as Dell, Lenovo and Hewlett-Packard are confirming this trend as many computer buyers opt for portables over desktops.

According to preliminary data from IDC, total desktop and notebook growth in October, November and December was 19.2pc or 189,042 units. Although desktops outsold notebooks in real terms with 124,674 units shipped compared with 64,368 units, the notebook category grew year on year by 58.2pc whereas desktops grew by 5.7pc.

Consumer notebook shipments doubled, rising by 106.7pc on the same quarter a year ago. Consumer desktop shipments grew by 16.7pc by comparison. In the business sector, desktops grew by just 1.2pc and notebook sales increased 35.2pc, IDC found.

“There’s definitely a transition from desktops to portables,” comments Greg Tierney, client systems marketing manager with Dell. Factors such as longer battery life, better performance, improved connectivity and a lower cost of supporting the product now mean laptops aren’t playing second fiddle to desktops in terms of features, Tierney says.

“The cost of supporting mobile users used to be higher for businesses,” he adds. “Reliability [with notebooks] probably wasn’t as good as it is today.”

In the past, portables had to be replaced more frequently than desktops and they cost more. Prices have dropped significantly, due largely to increased production of LCD displays, which Tierney says have historically been the single most expensive component in manufacturing laptops.

The upsurge in notebook sales has happened in tandem with the spread of wireless connectivity with wide availability of Wi-Fi hotspots as well as the 3G phone network. Dell is agnostic about which will prove more popular, as its laptops come with connectivity options for both. “I don’t see them [Wi-Fi and 3G] as competing technologies; they’re complementary,” says Tierney. “It’s about connecting to the most suitable and fastest network that’s available to you.” This means being able to connect to a Wi-Fi hotspot when a person is in a hotel or coffee shop but switching to a 3G link to remain connected while on the road in a taxi, for example.

Although Tierney would not reveal exact figures as to the numbers of notebooks Dell ships relative to desktops, he points out: “Of the corporate market in Ireland, we have a 42pc share. If IDC is seeing a shift, you can be sure we’re in line with what’s going on in the market.”

Throughout the EMEA region as a whole, a combination of consumer sales and more laptop purchases meant PC shipments increased 19pc in the final quarter of last year, IDC said. For the first time, PC shipments in the region have overtaken those in the US.

One of the major deciding factors influencing demand for laptop computers, says Ken Breen, managing director of hardware reseller Qualcom, is price. “The No 1 factor has to be price. We can now sell a notebook computer for around €629 ex Vat. Two years ago it started at around €1,200.

“Our figures indicate that notebooks are selling at three times the rate of desktops over the last few months. According to our figures, desktop sales have risen 1pc whereas notebooks are up 35pc in the last quarter,” says Breen. “Another defining factor is that while the price difference between notebooks and desktops has disappeared the technological differences have disappeared also and notebook computers are just as powerful. The onset of broadband is also making remote working viable. Anyone in senior management or sales and marketing or in a field where versatility is key, the notebook PC is the solution.”

The country manager for Ireland at Lenovo, which acquired IBM’s PC division last year, Fiona O’Brien confirmed that while notebooks aren’t outselling desktop PCs in volume terms they are outselling them in terms of growth by miles. “The growth in demand is a reflection on the working life of people today,” she says. “People are striving for a better work-life balance and the cost of the notebook technology is dropping.

“You are also seeing a major trend whereby manufacturers are shipping embedded mobile SIM chips inside notebooks to enable people to enjoy 3G-based remote access anywhere,” she notes, highlighting a recent collaboration with Vodafone to integrate 3G functionality into its latest ThinkPad T60 and X60 range of notebook PCs.

The versatility afforded by notebooks and the surge in demand driven by falling prices encouraged savvy businessman Robert Brennan to establish The Laptop Shop in Stephen’s Green Shopping Centre specialising in the sale of some of the latest sleek notebooks as well as a hoard of accessories and devices. Already a roaring success, Brennan is planning to open a second Laptop Shop in the Dundrum Shopping Centre later this year. “Laptops are becoming as powerful as their desktop counterparts,” he says. “New dual-core processors are boosting notebook performance by 40pc.”

Brennan acknowledges there is a trend towards individualisation amongst laptop owners that manufacturers have yet to exploit. “At present people are looking for slimline, snug and trendy notebook bags that we import from San Francisco and Australia. In terms of the laptops themselves, manufacturers are still a little conservative about their appearance but I’m pushing some of my suppliers to diversify and make interesting laptops — for example, pink laptops!”

The increasing capability of notebook PCs, Brennan says, is also leading to them being used as not only a desktop replacement but an entire entertainment facility. “Notebooks are boasting graphics capabilities as good as any desktop with some models featuring 500MB graphic cards. We are noticing a trend whereby non-nationals living in Ireland are buying them to watch TV on as well as play video games and surf the net.”

But will the sleek notebook ever replace the traditional desktop? “Not likely,” says Brennan. “But there is a chance that in volume terms notebooks could one day eclipse the desktop. At the moment notebooks are 25-35pc of the overall market. They are becoming more and more mass market because they are less expensive.”

By John Kennedy and Gordon Smith

Pictured: Fiona O’Brien, country general manager for Ireland at Lenovo