Notebook sales hit new highs

Notebook unit sales in May increased by 33 percent from April and rose 58 percent compared with May 2002, according to new data from NPD Techworld, which tracks retail sales in the United States. Consumer notebook revenue passed that of desktops, although fewer notebooks shipped in terms of units, the firm added.

Portable computers have become increasingly popular with consumers and also small businesses that shop at retail. Analysts say that many buyers are stepping up to a notebook when replacing an older desktop--despite the additional cost--in order to gain portability and for the cachet of owning a laptop.

Notebooks hit new highs in both unit sales and revenue during May, while the average selling price for the category fell to a new low, said Steve Baker, an analyst with NPD Techworld.

Portables captured 54 percent of all computer revenue at retail for the month. The notebook segment hit that revenue record by increasing its share of unit sales to 40 percent of all computers at retail, its best monthly performance to date.

The increase in unit sales offset a decline in average selling price. The average price of a notebook sold at retail during May fell to $1,294, Baker said. That figure, a $75 decline from April and a year-over-year drop of more than $250, marks the first time that average notebook prices have fallen below $1,300, Baker said.

This increase in revenue and unit sales for notebooks, coupled with a boost in unit sales of flat-panel displays for desktop PCs, indicates a changing of the guard for computer hardware. Notebooks and flat panels cost more than desktop PCs and traditional cathode-ray tube monitors, respectively. Despite this, consumers are moving to portable machines and slim displays in greater numbers because of a perceived increase in value, Baker said.

"It unquestionably shows that people are willing to pay more for technology that has value," Baker said. "But value doesn't mean cheap. Value means price-appropriate."

Overall, Baker said, May sales showed signs of improvement, despite easy comparisons against a fairly weak May 2002.

At the same time that notebook sales have continued to improve, PC unit sales have witnessed smaller declines in past months. The challenge for the notebook category will be continuing the momentum through the summer. August is typically the second best month of the year for notebook sales, following December, Baker said.

Desktops also fared relatively well during May. Desktop PC unit sales were up 5 percent from April and were essentially flat year over year, decreasing by 0.3 percent from May 2002.

The average selling price of a desktop in May was $757, about the same as in April, Baker said. Average prices have increased from a low of $717 in February, but a trend toward desktops priced under $800 has taken root.

The low average price for desktops is a "good indicator that everyone is looking at the opening prices as being the best value in the category," Baker said.

PC makers, including Hewlett-Packard and eMachines, have responded by offering new desktop models with more desirable features, including CD burners, at prices as low as $399. And desktops with DVD burners are now available starting around $800.