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Intel may change notebook market

Intel's notebook motherboards may make it hard for Japanese notebook makers to maintain a competitive advantage.

Intel's (INTC) entry into the notebook PC motherboard business may make it difficult for Japanese notebook manufacturers to maintain the kind of competitive advantage they've had to date.

Intel's new notebook PC circuit board, announced in February, "poses a threat" to Japanese notebook makers in the United States since the board now makes it easier to construct notebook PCs, according to a recent report in Nikkei Business, a leading Japanese business publication.

Japan's notebook manufacturers such as Toshiba and NEC are some of the largest in the world.

To date, the manufacture of notebook PCs has required a high level of manufacturing and engineering expertise. But an Intel-built notebook motherboard, which holds the guts of a notebook computer, could reduce the need for notebook manufacturers to have this kind of expertise in-house.

Toshiba, for example, has prided itself on making most of the internal electronics in a notebook, and in the process, used this as a competitive advantage in time-to-market, features, and performance.

But Intel has now put a good portion of the electronics on the new motherboard, or "module," as Intel has elected to call it. Moreover, the chip giant is also becoming a force in notebook PC chipsets--the chips that allow the processor to communicate with the rest of the PC--another area that notebook PC vendors such as Toshiba have excelled at in the past.

Specifically, the report claims the Intel module "makes it easy for PC makers that lack good integration technology to manufacture notebook PCs," since any notebook manufacturer will now be able to use the Intel module.

The report goes on to say that as a result of this highly-integrated Intel module, the "difference between Taiwanese and Japanese manufacturers in miniaturization technology could disappear." Taiwanese manufacturers are some of the world's largest and most successful makers of desktop PCs, but compared with Japanese vendors, have traditionally been at a disadvantage when making notebook PCs. This could change now, the report says.

Indeed, if the desktop PC market--in which Intel supplies many of the core components--is any indication of what may happen to the notebook market, notebook computers will become increasingly similar at the basic hardware level, with differentiation appearing more in the areas of very-high-end features, software, service, and support.

Intel is an investor in CNET: The Computer Network.