And if Intel has its way, that means the great mobile migration of the last few years--during which consumers have moved from desktop PCs to the portability of notebooks--will continue in 2005.
The chipmaker unveiled on Wednesday a new version of its Centrino chip family for notebooks, a recipe it aims to use to--mainly machines that weight about 5 or 6 pounds--making them more useful as everyday computers.
Intel unveils Sonoma, an update to its Centrino package for wireless laptops, packing in more power, which could prove tempting to a new wave of buyers.
It's not just Centrino. Lower LCD prices are also helping make lightweight but potent portables more affordable. That could be just the thing to get consumers to shift from desktops and chunkier notebooks.
The new laptop technology, sometimes referred to by its code name Sonoma, pairs a handful of slightly faster Pentium M processors with the Intel Mobile Express 915 chipset, a group of supporting chips code-named Alviso that incorporates a number of performance enhancements, including a faster bus and higher-performance graphics, as well as a Wi-Fi module. One of two modules, a dual-band 802.11b/g module or a tri-band module that allows a notebook to operate on 802.11a, 802.11b or 802.11g networks, are required for a machine to be sold under the Centrino brand.
Those features are bound to tempt a new wave of laptop buyers, according to PC manufacturers.
"You're going to see a lot of people who were buying value notebooks one or two years ago who are going to step up, and they're going to be extremely happy with the overall performance jump they're getting," said Will Diehl, senior director of mobile products at Gateway.
For Intel, this means an opportunity to sell a wider variety of chips for each computer. A substantial portion of Pentium M notebooks come with the full Centrino chip bundle. Currently, 60 percent of Centrino notebooks also come with the more expensive chipset available in the Centrino bundle that includes integrated graphics, a number that will increase with Sonoma, Mooly Eden, vice president of the mobility group at Intel, said at a Wednesday press conference in San Francisco. The company has also worked to make wireless technology easier to use.
"Two years ago, the attach rate for wireless was less than 10 percent," he said. "People would tell me, 'It is user-friendly.
So far, Intel has garnered $5 billion off Centrino since it started reaching consumers about in March 2003, he added. Because notebook shipments are growing at about 16 percent annually, the number of notebooks in use will likely double from 2004 to 2008, Eden added. "I believe that everything eventually will be mobile," he said.
Intel and Centrino won't be the only driving forces behind the continuing mobile migration, he said. Prices on key components such as LCD panels have been falling as of late, helping PC makers lower their prices or offer models with larger screens.
"A lot of those trends, together with some of the performance (from Centrino)...are going to drive great growth rates in notebooks and will potentially start to cannibalize a lot of the desktop growth," Diehl said.
In the fourth quarter,jumped a healthy 13.7 percent, according to market researcher IDC.
Notebooks have been especially popular with consumers recently, with unit retail sales growing at double-digit rates in the United States. During the 2004 holiday season, between Thanksgiving and Christmas, notebook sales jumped by 26 percent at U.S. retail outlets, according to preliminary figures from The NPD Group. Gartner, meanwhile, predicts that during 2005, notebook shipments will rise 16 percent to 54.5 million units. Consumer notebooks, it said, will total just more than 20 million units, up almost 20 percent from 2004.
But Intel can't count on hogging the market. Rival Advanced Micro Devices recently began talking up its, and expects to release the lightweight-laptop chips in the first half of this year.
Weighing on their minds
Many of the more popular consumer notebooks lately have been larger, less-expensive machines, sometimes called desktop replacements. Intel has set out to change that with the new Centrino, which it aims to use to boost the performance of lightweight notebooks and thus make them more mainstream, at the same time that it captures a larger piece of the notebook market with the Pentium M bundle.
Although consumers have been able to purchase 5- or 6-pound notebooks for years, buyers typically had to make compromises to purchase those systems. A given 5-pound machine's performance is usually lower or its price higher than a heftier 7- or 8-pound model, which might have a higher-performance processor, a larger hard drive or a bigger screen for a better price. Enter Sonoma.With Sonoma, Intel is boosting the clock speed to 2.13GHz from 2GHz, and is speeding the bus from 400MHz to 533MHz. The chip also comes with technology for intercepting many viruses, a first for Intel notebook chips. Overall, the new chip gives about a 12 percent performance boost over existing Centrino notebooks and a 25 percent boost over the first Centrino notebooks at the same levels of power consumption, Eden said.
Additional features such as array microphones will also make these notebooks more amenable to.
The first systems out of the gate from major manufacturers will sell for a premium, falling into the $1,300 to $1,500 range, somewhat more expensive than today's Centrino systems, which start at about $1,000 to $1,200 when sold direct, and around $1,300 to $1,400 at retail. Over time, prices on Sonoma systems are expected to come down, making them more enticing to consumers.
So far, "I haven't seen a lot of Centrino notebooks that bust the $1,300 (notebook) average selling price," said Steve Baker, an analyst with The NPD Group, which tracks retail sales in the United States.
During December, preliminary numbers from NPD show that Centrino and Pentium M processor notebooks represented just short of 22 percent of notebooks sold at retail in the United States (a strong position compared with a year ago), but less than Celeron M systems, which were about 27 percent of sales, and Pentium 4 systems, which were almost 26 percent of sales. AMD processor notebooks, including those based on the Athlon XP, Athlon 64 and Sempron, made up nearly 20 percent of sales.
"If they want to have more (Centrino unit sales) volume, yes--prices will have to come down," Baker said. "Without question there's a huge amount of value below the average price line" of about $1,300.
Dell's latest, announced Wednesday, starts at about $1,300 with a Pentium M and 15.4-inch screen. With a tri-band Intel wireless module, 512MB of RAM, a 60GB hard drive and a CD burner, it costs about $1,600. Toshiba is also offering several models, including the Satellite S45-S331, which starts at about $1,500 with a Pentium M and a 15.4-inch screen.
While most new Centrino systems announced Wednesday start at about $1,300 to $1,500, Toshiba also unveiled a new business-oriented Tecra A3 model that starts at about $1,100. The all-in-one machine, which packs a fixed CD burner drive, pairs a Pentium M with a 15-inch screen, 256MB of RAM, a 40GB hard drive and a Wi-Fi 802.11b/g module from Intel. The company also unveiled a Tecra A4 model that comes with a 15.4-inch wide-screen display and similar processor, memory and hard drive specifications for a starting price of about $1,300. Both machines use built-in graphics supplied with Intel's mobile 915 chipset, the company said in a statement.
IBM has also added the new chips to its ThinkPad line. It will offer a ThinkPad T43 model, which incorporates the chips along with IBM tools such as Rescue and Recovery 2.0 for recovering from viruses or retrieving lost data. The T43, which IBM says will begin shipping next month, offers a range of Pentium M processors, Intel wireless modules and hard drives up to 80GB for a price starting at $1,499, the company said in a statement.
Gateway's first Intel Mobile Express 915-based notebook will arrive for businesses in February, the company said. It did not offer any details on the machine. Hewlett-Packard is also expected to come out with machines based on the new chips at a later date.Higher prices or not, Intel believes the notebook market is moving toward Centrino. Executives at the company have said that consumers, many of whom are second- or third-time PC owners, as shown by NPD data that reveals notebook buyers average 2.7 computers per household, are growing more sophisticated when it comes to choosing notebook models.
Thus, the chipmaker believes people who purchased inexpensive but hefty desktop replacements in the last few years will opt for lighter weight and longer battery life the next time around.
Many PC executives agree.
"Our customers are definitely cognizant of the benefits of mobility," said Gretchen Miller, director of product marketing for the Inspiron line at Dell. "There is a greater range of choices available today than ever before. Customers can choose from the (Dell Inspiron) 700M, something that's basically a replacement for a portable DVD player with computer capabilities, on up to full desktop replacement notebooks."
However, weight and design are becoming more and more important to customers, she said.
At some point the notebook phenomenon will run out of steam and growth rates will slow, Baker said.
But "if the goal is to make PC household penetration and ownership look a lot more like television ownership--there are one or two communal products in the house and everybody else gets one for themselves--if that's the case, then there remains a pretty big opportunity for people to add more PCs to their home," he said. "If that's what they're really doing, there isn't any question the best product for that is the notebook, along with the Mac Mini."