Notebook prices keep falling
By Staff -- Purchasing, 7/16/1998
Big news in the notebook computer market is that prices have dropped significantly in the past few months and are expected to continue to fall until the end of this year. In 1999: Tags still will be low, but decreases will occur at a slower pace than in 1998.That's the word from Norm Bogen, an analyst with In-Stat in Phoenix, Ariz. The dramatic decline, he says, is due mainly to lower-priced components, especially screens. "Prices on notebooks with TFT (thin film transistor) screens have decreased an average of $1,000 in the past year. Units that used to cost $6,000 a year ago now are priced at about $5,000." The same kind of price drops hold true for notebook PCs equipped with lower-quality screens.
At the same time, notebook PC makers are introducing screens that are bigger than ever. For units priced in the $6,000 area, buyers are used to purchasing notebooks with 12-in. screens. Now, those notebooks with tags of around $5,000 come equipped with either 13.3-in.- or 14-in.-screens. What's more, Bogen says, these units have faster processors, more memory, more storage, and more options.
Those top-quality, albeit smaller-sized, screens are standard now on notebook PCs priced at less than $2,000. This category of notebooks, Bogen says, is the fastest growing in the U.S this year. "I didn't think that this would be the case--that buyers could purchase notebook PCs with the highest-quality screens for this price."
All told, notebook PC makers will ship about 17 million units this year, up from 14.6 million units in 1997, says Bogen. Next year, that 17-million unit figure should climb by another 20%, with computer makers shipping 20.1 million units. Looking ahead, the year 2000 should see continued growth in demand, with units shipped hitting the 24.0 million mark.
"Demand is good, but it isn't so good that it's exceeding supply," says Bogen of purchasing queries on supply hassles of 1997. Notebook PC makers have ironed out shortages and delays which plagued buyers last year. These should be a thing of the past.
This is because there are a number of notebook PC makers willing to compete with big providers in the U.S.--IBM, Toshiba, and Compaq. Dell and Gateway, for example, both offer corporate buyers "very competitive products at good prices," says Bogen.
Of the big three, Toshiba's market share has declined some, Bogen points out. "The company still has a good product and still maintains a dominant position in the market, but Compaq is giving Toshiba a run for its money."
Looking ahead to 1999, Bogen says corporate buyers of notebook PCs can expect to see continued price declines, although the cuts will not be as rapid as this year.
In technology, PC makers are introducing machines that are smaller than notebooks, but larger than palmtops, such as Toshiba's Libretto. "This is not a huge market," Bogen says, "although there is a niche for these kinds of products." These machines have a smaller form factor, full Windows operating system, 8.4-in. monitor, and a moderately sized keyboard. However, they are not considered to be replacements for desktop PCs.
Corporate buyers, however, will see faster migration from desktop processors to notebooks once chipmakers figure out the heat-generating problem inherent to the smaller units. Disk capacity will increase as well. "It has been lagging," Bogen says, "but it will catch up. This will help to encourage replacement of desktop PCs with notebooks."
Always looking for improved performance, buyers will have to wait for batteries with longer lives. While notebook PC makers continue to work on the problem, Bogen believes, it isn't likely that they will be able to come up with a battery that lasts more than four hours.
It also doesn't appear that screen size is going to get any larger over the next few months. "Why would users want to carry around a larger machine," Bogen asks.
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