The rise of the laptop looks set to continue deep into the New Year. Last November the Taiwan-based Topology Research Institute predicted laptop shipments in 2008 would reach a record breaking 116 million units, with Apple and Acer expected to see their volume sales grow by 30 per cent. Gateway has also revealed that it will increase its output of notebook computers and decrease production on their range of desktops during 2008. First-tier ODM notebook maker Wistron is expected to enjoy a 40 per cent jump in shipments during 2008.
One factor contributing to the dominance and growth of the laptop is its price. It’s possible to pick up a solid notebook today for as little as £300, while a certain ultra-mobile is now being sold for as cheap as £219. However, is the existence of such a cheap priced laptop a good thing? Can any money be made on these?
"For the consumer this obviously appears to be a good thing," says Andrew Ward, sales manager at Spire Technology, "but the £300 laptop does not offer the pleasant out of the box experience that the consumer generally demand, and that the industry should be pushing. Distributors, sub-distributors and retailers will all struggle to make a living selling ultra-cheap laptops."
Michael Breeze, marketing manager at Interactive Ideas, disagrees: "The lowering of the price is a good thing as it allows more people to have a laptop. This in turn creates a larger user base, a user base that will require the add-on products that we sell."
"The existence of a £300 laptop is a good thing, as it makes portable computers affordable to the majority of people," adds Mark Ceraolo, the Lenovo specialist at Interface Solutions. "Of course a fixed margin on a lower value product will reduce profitability, but the potential volumes on these price point products will result in overall increased revenues."
So if a £300 laptop is not necessarily a bad thing, then is it conceivable that they could become cheaper still? And does this spell trouble for more high-end devices? Sam Patankar, director of Nandtech, believes that laptop prices will continue to fall, but that there is enough demand to keep the top end afloat too. "In truth, I can see a £200 laptop being the norm, with perhaps an older Intel chip, but it wont change the fact that some people still want a laptop that will run high performance software or games, or will just get one as a vanity purchase."
Ward also accepts that prices are set to fall further, but thinks that too much is being made of the cost. "There is talk of cheaper laptops, but again the technology and the quality is taking a step back," he says. "Consumers are demanding more and more from their equipment, and the manufacturers are trying to be cheaper and cheaper. The channel needs to focus more on the quality of product rather than the price point."
It’s not just the price that has aided in the recent success of the laptop. These portable machines are able to offer nearly as much punch as their desktop cousins, so it’s not surprising that more and more consumers are replacing their home and office computers with the more convenient alternatives. However, could the laptop itself also be at risk? Particularly now that the ultra-mobile market has a new hero in the form of the Asus Eee PC, retailing for the not-so-princely sum of £219.
"Ultra Mobiles are fantastic but they are not set for domination just yet," explains Mike O’Connell, notebook and analyst specialist at Interface Solutions. "Take the first generation Samsung Q1, it is in essence a fantastic bit of kit, but it didn’t get the best review. It did miss a few tricks by omitting cameras and maybe a GPS module for Sat Nav capabilities, but it was a good start. It is only inevitable the UMPC will become the machine of choice, but not just yet."
Patankar, however, doesn’t agree ultra-mobiles will infringe on the laptop monopoly: "I think the new Eee PC is a great aside, and a distraction, I may get one myself. But at the end of the day it’s usability that counts. If you use your laptop for a lot of things, then a large screen, and a decent sized laptop is the only way forward."
"The Eee PC has opened up a discussion about just how much computing power is needed by the majority of users," adds Stuart Watson, product manager at VIP, "In recent years computing power has been dictated by the evolution of components, but this increasingly outstrips the needs of most users and leaves them paying for technology they don’t need. The Eee PC represents a vendor taking a step back and considering what most consumers actually use a laptop for: things such as web browsing, email and instant messaging. If, as early feedback suggests, this taps a big demand in the market, then the rise of the ultra-mobile could well continue."
The Asus Eee PC has certainly attracted interest, particularly from parents who are looking to supply their children with cheap but effective technology. It was also one of the most wanted gifts at Christmas in America, and a reported 200 pieces were snapped up in 20 minutes when the system appeared on Taiwan’s shopping channel, ETTV. Yet Ceraolo doesn’t believe they will displace laptops as the portable of choice: "The ultra portable laptop is a growth area and a number of vendors are fighting for 2008 market share. But I still feel that a laptop is more practical and user friendly than an UMPC."
So if laptops are not going to be displaced any time soon, what’s next for them? What more can be squeezed into these tiny little machines? "The new 45nm Penryn chipset is technically amazing," says Patankar, "and it is worth keeping an eye on the nanotechnology side of things, as it could possible get smaller still. I do think we will see increased use of cores though, as the price of getting smaller increases exponentially. Laptops will follow the desktops eventually, in fact probably sooner to stimulate laptop sales.
So what of Intel’s new quad-core mobile processor, which is due for release in the second half of 2008? Could we not see that running into the mainstream in 2009? Ceraolo doesn’t think so: "Whilst quad-core applications are not supported by many software applications, they will fail to make the jump from niche to mainstream in a notebook. Currently, for 99 per cent of users, quad-core is a waste of processing capacity for 99 per cent of the time. However, saying that… if Intel advertise, sales will come."
The future of the laptop is starting to look more exciting by the moment.
A rugged industry
Making big margins on laptops is not such an easy thing in today’s market. Particular as prices continue to tumble as fast as they do. Many retailers are relying on the profitability of add on sales to keep their business ticking. However, GETAC may have a solution.
The rugged laptop market is very different to the commercial laptop one, they appeal to those who work in industrial environments, the military, health care, manufacturing and field services. They also offer far better margins for retailers, as they are generally more expensive due to their unique selling point.
"More and more consumers are becoming mobile savvy and can now identify with the risks of taking important information on the move," says Julian Willis, sales manager, GETAC. "They are now very keen to take rugged technology more seriously and choose equipment based on its hardwearing or security features very rarely found in mainstream products. This will certainly lead to an increase in rugged products available to this market. Hybrid solutions that suit this market’s specific requirements will be one of the next major developments in the rugged industry.
"More importantly, rugged technology has first and foremost been designed and developed to meet the needs of specific markets, such as the military. A lot more time and consideration goes into each rugged product, in comparison to commercial laptops, to ensure they meet the high standards that are expected of them. Also the rugged laptop market shows no signs of slowing down, it can only grow from here and we expect for it to grow at a rapid pace."
For more information on how to get hold of GETAC rugged laptops, please visit www.getac.com, or call them on 01952 207 231.