Notebook computers are on their way to exponential growth world wide. Owing to its customized configuration, handling conveniences, and enhanced mobility advantages, it is going to change the present scenario very soon. Market experts have projected that this exponential growth in the production and sale of notebook computers will definitely cross the number of desktop computers in the year 2009.
We are observing oncoming of the ultra-thin, ultra-low cost system options that are being introduced by various manufacturers including the major players like Apple, Sony, HP, Dell, Fujitsu, Acer, just to name a few. Some of the market analysts however are a little skeptical about this horizon of acceleration in the growth with its probable undercutting of the profit margins.
According to the projected estimations, the notebook shipments are expected to touch a figure of 136 million notebook computer units in the year 2008 itself. This would be a jump of almost 25.6% from the last year’s numbers. On the other hand, this increase in the number of notebook computers will make negative impacts on the sale of desktop computers. The effect has started showing with declining numbers now. Alex Yang, an analyst at the ‘Lehman Brothers’ says, “Desktop shipments will decline about 1.3 percent from 2007 to reach 143 million units”.
The growth rate graph for both of these products has been showing drastically different trends. Worldwide desktop unit sale demonstrates a single-digit growth while the notebook computers unit sale is enjoying a healthy growth rate of more than 20% per year and this is for several years now. Market specialists also believe that the notebook manufacturing companies will be enjoying the year 2008 as one of the most prosperous year ever in their history. On the contrary the desktop manufacturers will have to shift their attention to a “corporate replacement cycle”. Many of the speculators say that it will begin sometime in the last quarter of this year.”We expect rapid notebook PC price erosion to continue generating new demand, and the narrowing price gap between notebooks and desktop PCs should also help increase the pace at which notebooks replace desktops,” expects Alex Yang.
Low cost notebooks will now have a new phase in the markets. Its growing demand has compelled many of the manufacturers to concentrate their efforts on designing the technologically advanced and affordable notebooks. One of the big unknowns of the notebook market in 2008 is going to be the beginning of a new era with notebooks that will cost below $400. Taiwan’s “Asustek Computer” is now almost ready to be on the shelf with its first such notebook, the “EeePC”. The systems are expected to begin with the “shipping by midyear and be broadly available from a variety of companies by the end of 2008″, according to the company.
This new low cost notebook sub-sector has strong possibilities to change the market standards. This sub-sector is also expected to expand as the demand is abnormally high .This demand will be a pushing factor for the growth engine to meet with the required penetration rate in the markets. Once the sub-sector is entered in to the markets and is established, it will change the face of the existing notebook market also. Alex Yang says, “The latter would be bad for the entire notebook industry but we believe that it is more likely that this new sub-sector will expand the notebook market”.
Latest technological inventions and new development in the hardware technology will bring in new types of machines in near future. The year 2008 will also be witnessing the introducing of new operating systems and processors that will help in boosting the notebook productions .New nano-technology based dual-core notebook processors and the quad-core chips from Intel would be completely changing the notebook outlooks. This is expected to happen by the end of this year only. Similarly, a timely updating of the Microsoft’s ‘Vista’ would certainly indicate the onset of a new era of “corporate replacement cycle” by the time this year will approach an end.
Notebook manufacturers are facing an uncertainty over the supply and pricing of ‘LCD Panels’. This could however, be one of the big risks that the manufacturers would have to face at the same time. Another concern for the non-Chinese manufacturers is the production costs in china. These costs are affecting the world-markets in many ways and new markets are also coming up very fast. Such vitality of these emerging markets is also among the big causes of concern.
Chinese labor laws have recently been amended and this would make an impact on many manufacturers including hardware companies with hike of almost 25% in the labor costs. This rising factor in costs would in turn be an undercutting factor for the point off gross profits. Overall impacts of the slowing down of economy in the United States would also have related reflection in major developing economies like Brazil, India, China, and Russia. These countries are major computer market contributors and therefore could face such tremors.
Taiwan’s other major notebook manufacturers including ‘Wistron’ and ‘Compal’ would be among the top beneficiaries from this market growth, according to several market analysts .Shipments growth rate of both these manufacturing companies is rising at the rate of 60% and 30% respectively. ‘Quanta’ and ‘Compal’ were the big winners in 2007 with unit shipments up 62 and 56 percent, respectively.
Beginning with the “corporate replacement cycle” the notebook computer market will be witnessing sea changes and would also require adapting to new production and marketing strategies for all the manufacturers in near future.