The notebook market is awash in contradictions, according to
May notebook sales, with one manufacturer gaining market share by embracing low-end chips and prices, while another succeeds by
pursuing precisely the opposite strategy.
In May, longtime market leader Compaq Computer dropped below Toshiba, which regained the top spot by releasing lower-priced mainstream notebook computers based on
processors from Advanced Micro Devices,
according to research from ZD
Meanwhile, perennial market underdog Sony has made significant strides by
sticking to its higher performance--and priced--notebooks.
Toshiba recovered the No. 1 position by grabbing 34 percent of the
retail market, edging out Compaq, which took 33 percent. Toshiba's
gains were probably a result of releasing a raft of aggressively priced
systems offering mainstream performance, according to Matt Sargent, an
analyst at Market Intelligence, adding that the monthly results may not
indicate an overall shift in the market.
Toshiba also saw its retail distribution strategy pay off. The company
focused the majority of its shipments into computer stores, shipping
68 percent of its products there, rather than office supply or
consumer electronics stores. These PC retailers sold 55 percent of all
retail notebooks in May, according to the report. By comparison, Compaq
only shipped 45 percent of its notebooks to these stores.
Compaq may be suffering from its management upheaval and larger corporate
problems, Sargent speculated, but cautioned against reading too much into
one month's sales. "It's really too early to say they've done anything
wrong, even though they have some overall issues.
"We tried to pull this apart and figure out why, but it wasn't really
clear," said Sargent. "It appears to be a seasonal shift."
Toshiba's gains can also be traced to its strategy in the price-sensitive
retail market. Toshiba's prices are the lowest in the retail notebook
market, 5 percent below the average, the report found. But that reasoning
doesn't explain the recovery Sony has undergone in the retail market.
Sizing up Sony
The price of an average Sony notebook is $1,830, higher than Toshiba,
Compaq, or IBM, which ranked No. 4
in the retail market with 11.7 percent. But despite its relatively higher
prices, Sony notebook market share has skyrocketed, from .3 percent in May
of 1998, to 13.7 percent this past May, propelling the company past IBM into
Although Sony's prices are not as high as they once were, the company has
mainly focused on streamlined designs and performance systems, and the
strategy appears to be paying off, Sargent said.
"Sony's pushed up real well," he said. "Their year-over-year volume
increase is just amazing. There's definitely a market for a sexy product,
differentiated on functionality and performance."
The study focused only on retail sales, and did not track shipments of
direct sellers like Dell Computer or Gateway. Studies earlier this year from
International Data Corporation and PC Data also concluded that Toshiba had
regained the top position in the retail notebook market.