Convertibles: The new laptop bling?

Hold on to your keyboard. Laptop computer screens that flip around to become convertible tablet PCs could be an increasingly common sight within the next three years.

With manufacturing prices dropping and Microsoft touting tablet PCs, shipments of the products are expected to hit 9.7 million units by 2008. That's up 708 percent from the 1.2 million units expected to ship this year, according to a forecast by market researchers at IDC. Convertible notebooks are expected to make up the majority of those shipments, IDC said.

The projected number of tablets is small compared with the overall number of notebooks. After all, 62.5 million notebooks are expected to ship this year, and that number is forecast by IDC to climb to 100.3 million in 2008.

If every one of those tablet PCs that ship in 2008 were actually a convertible notebook, fewer than one out of every 10 notebooks shipped would have tablet capabilities. Still, that's a big jump from the less than 2 percent share of notebook sales tablets now have.

Just as past hardware trends--from personal digital assistants to flat-screen monitors--took years to claw out a share of the world's tech spending before really catching on, convertible laptops are still in that early stage where they have to be proven even to bleeding-edge buyers.

"Manufacturers and consumers are still trying to figure out what to do with tablets and if they make sense for their daily lives," said IDC analyst Richard Shim.

But it's fair to say the convertible notebook share of total laptop sales could increase as the years go by for one simple reason--price. Today, making a convertible laptop can cost $300 more than a typical notebook. But as manufacturers ramp up their tablet production during the next two years, that premium could drop to $75, said Roger Kay, an independent analyst.

Also, as PC manufacturers deal with constant pressure to reduce the prices of their basic models, tablet capabilities could well become one of those nifty features PC makers offer to up their profits.

Tablets come in two basic forms: notebooks with screens that flip around 180 degrees and lay flat over the keyboard to make a tablet, and so-called slate tablets, which look more like an Etch A Sketch toy. The slate-style devices weigh between 3 and 4 pounds and can cost as little as $1,000. Convertible tablets weigh a bit more and retail for as little as $1,200, depending on features.

Companies like Gateway, which released an updated version of its laptop designs on Oct. 6, are optimistic about the future of tablet PCs.

"We can see a time in the future when we (and other OEMs) have a line of notebooks that can either be purchased in traditional or convertible form factor because they are manufactured using similar resources," said Gateway spokeswoman Kelly Odle. Gateway is joined in the market by Acer, Hewlett-Packard, Lenovo, Toshiba, Fujitsu and several others.

Microsoft, which has been a major backer of tablets, has been making the rounds with educators and developers to tout the benefits of tablet-based computing.

Back to the future
While the Windows XP Tablet PC Edition 2005 is currently available with the purchase of a tablet-style device, users can get free upgrades at the Microsoft Web site. The next version of the Tablet OS is slated to be part of the upcoming Windows Vista Home Premium Edition. The Premium version, which is based on Vista Home Basic, is similar to the Windows XP Media Center Edition (XP MCE) but adds features designed for tablet PCs such as improved handwriting recognition and ability to use a tablet's stylus to pan through documents.

If popularizing convertible displays on notebooks sounds far-fetched, consider the path wireless networking cards took to becoming a staple in laptop computers. Less than five years ago, consumers needed to purchase Wi-Fi cards separately if they were even thinking of accessing a hot spot. For PC makers, that required installing a dedicated PCI slot and staffing their perspective help desk employees to help consumers unfamiliar with the setup procedure. Nowadays, embedded wireless networking cards are more the rule than the exception in laptops.

There are major challenges to overcome, of course. Currently, PC makers use separate manufacturing processes for clamshell and convertible laptops, particularly when it comes to attaching the display. The core hardware for a standard laptop generally uses two hinges on the outside of the notebook. By comparison, a convertible works on a single-hinge model, which is usually anchored to the underlying frame. Simply installing a rotating screen on a standard laptop chassis is uncommon.

But a concept that just a few years ago seemed like another fanciful idea still has plenty of room to run. After all, even pen computing, one of the great venture capital sink holes of the 1990s, eventually morphed into PDAs.

And few people these days would call a Sidekick or a Treo smart phone just a silly little gadget.