Notebook sales on the go again

A new study shows that the percentage of notebook PCs shipped, versus their desktop counterparts, rose in the first quarter of 2002 for the third consecutive year.

John G. Spooner Staff Writer, CNET News.com
John Spooner
covers the PC market, chips and automotive technology.
John G. Spooner
3 min read
Notebook PCs continue to move on up in the world.

A new study from researcher IDC shows that the percentage of notebook PCs shipped, versus shipments of desktops, rose again in the first quarter of 2002 for the third consecutive year. Notebooks made up 23.8 percent of worldwide PC shipments in the first quarter of this year, up from 21.8 percent in the fourth quarter of 2001 and 22.3 percent in the first quarter of last year.

Sales are on track to break the 25 percent barrier in the next three years, according to IDC.

Notebooks have increased steadily as a percentage of total PC sales since the first quarter of 1998. At that time, notebooks comprised 17.6 percent of the market. By the first quarter of 1999, they claimed 18.2 percent of the market, jumping to 20 percent by the first quarter of 2000. Since the first quarter of 1998, unit shipments have doubled from about 3.6 million to about 7.2 million in the first quarter of 2002, IDC said.

The steady increase affirms some long-held beliefs. For years, analysts and PC makers have predicted a more mobile world in which notebooks eventually account for more than half of all PCs sold.

That would be a major boon for computer makers, strapped by the PC slump of 2001. Companies that sell both notebooks and desktops typically make more money for each notebook because they can charge a premium for portability.

But it may take some time for notebooks to reach the 50 percent level. IDC predicts that, with the return of corporate buyers to the market, the percentage of notebooks sold will rise to about 25 percent by 2005 and as much as 30 percent by 2006.

Consumers on the spot
While notebook sales have been particularly brisk at retail, growing by 30 percent or more in February and March, sales to corporations--which account for the largest portion of notebooks purchased--were slow in 2001 and the first quarter of 2002.

"There has been a greater shift in the notebook mix in the consumer market" than in corporate sales of late, said Alan Promisel, notebook analyst at IDC.

One reason is that, especially during 2001's PC market slump, notebooks have come down in price. Notebooks with beefy hardware configurations, including 1GHz processors and 14-inch displays, are now available for prices as low as $999.

These improvements in technology, including faster processors, crisper screens and more eye-popping graphics, have combined with lower prices to encourage consumers to take the plunge and buy a notebook. And that's despite the fact that a portable machine still carries a price premium, usually about $400 to $500 more than a desktop.

Looking forward, IDC predicts overall PC unit shipments will increase by about 3 percent in 2002, after falling about 5 percent in 2001.

Notebooks' long-term prospects revolve around an economic recovery and companies beginning to upgrade their PCs again. Most PC makers expect corporations to start upgrading, after holding off through 2001 and part of 2002, in the second half of this year. But the exact date of that return and the strength of initial sales increases are still up in the air.

Many companies looking to upgrade their PCs will choose mid-range notebooks this time around instead of desktop PCs, IDC's Promisel said.

As a result, he said, "I think we're going to see a pretty steep incline in the mix in the 2003 time frame...because of commercial interest in portable computing."