The sub-$1,000 desktop phenomenon, which initially affected the consumer market and is now affecting the commercial market, has resulted in increasing price pressure on notebook products.
"A collapse in notebook pricing is redefining the low-end notebook's image, design and features," says Katrina Dahlquist, senior analyst for mobile computing at International Data Corp. "Traditionally, notebooks priced under $2,000 were primarily end-of-life systems sold through retail and close-out channels such as price clubs and catalogs. Today, these products are priced under $1,500 and an increasing percentage of configurations are new designs at $1,499 price points."
Vendors in the portable arena are fighting to stay clear of the commoditization trap-the challenge of building differentiated products without getting too exotic. Buying criteria has made a significant shift away from seldom utilized technology advancements and more toward reliability, durability and service and support. As in the desktop arena, commercial PC penetration, especially in larger organizations, will be limited because of a reluctance to change; however, there is still strong demand among high-end users for the latest notebook design marvels.
Additional IDC findings:
- Intel dominates the portable PC market, although AMD and Cyrix are making progress.
- Notebook form factor gaining increased storage capacity-10 MB in 1998 and 15 MB in 1999.
- DVD will take hold in consumer desktops, but demand in corporate notebooks will remain low.
- The industry is migrating to 14-inch LCD displays.
- The PC card-based 56Kbps V.90 compatible modem will remain the mobile professional's modem of choice in 1999.
- Windows 98 will not have a major impact on the portable PC market.