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Competitive Developments in the Global Notebook Market

by Jim Zimmerman, Analyst Perspectives
May 6, 2008 12:00:00 AM

We are pleased to be partnering with Analyst Perspectives and offering an excerpt of their high valued content. Click here to download the full report.
  
The notebook has been one of the fastest-growing segments within the PC industry and has gained substantial momentum across all major markets worldwide. Factors such as convenience, portability, light weight, etc., are fueling the uptake of the notebook.
  
Over the past few years, the global notebook market has witnessed fierce competition with each player looking to increase market share. Adding fuel to the fire, or rather, intensifying the competition among notebook players is the increasing share of notebook sales in total PC industry sales. The battle between HP and Dell has touched new heights with both players launching technologically-improved products. While the latter has mainly targeted the corporate segment, HP's focus area remains the consumer segment. Acer's strong performance in the Asia-Pacific and European regions makes it a possible contender for the top slot in coming years. Also, Apple's increasing prominence in the US market can portend a future contender for the top slot in the notebook market. Another tactic witnessed in 2007, one meant to gain greater market share, was the spree of acquisitions by leading vendors; for instance, Dell went in for multiple acquisitions, and Acer's acquisition of Gateway and Packard Bell.
  
The beginning of 2008 also saw some major announcements being made by eminent players in the global notebook market. For instance, a much-talked-about announcement has been the imminent introduction of a low-price notebook by Acer in the second half of 2008. To be launched in the Europe, Middle East, and Africa (EMEA) region, where Acer has a well-established base, the notebook would approximately cost USD 470 and have a 7- to 9-inch screen. Another interesting announcement was made at the launch of MacBook Air, which, according to Apple, is the "the world's thinnest" notebook. According to the company officials, the notebook is targeted at business class executives who are generally on-the-go. Weighing barely 3 pounds and equipped with a remote disc that enables a user to wirelessly install software from a close-by Mac or PC, the MacBook Air looks well positioned to grab a share of the enterprise segment.
  
However, notwithstanding the positives for the global notebook market, there are a few concerns still plaguing this market. Technical experts believe that poor battery life is still hindering the growth of the notebook. Though nothing revolutionary has been lined up to resolve this problem, analysts are optimistic that with better designs, better battery technology might also evolve. On the positive side, security concerns that had been troubling users for some time have now been taken care of with options such as encryption and fingerprint readers. Analysts are also hopeful about seeing advanced biometric devices equipped with integrated voice-recognition systems or Web-based retina scanners embedded in future notebooks.
  
The coming years could be witness to several interesting developments within the notebook market, with all players looking to launch advanced models. We expect the global notebook market could see sleeker designs, striking displays with better resolution, sophisticated integrated cameras, lighter keyboards, and enhanced screen hinges, to name a few innovations. Analysts expect that owing to intense competition among vendors, end-users will definitely stand to gain the maximum benefits. Industry experts also believe that integration of wide-area wireless technologies within notebooks will likely become an industry-set standard in the next two to three years. Talking about storage devices, analysts expect that solid state devices integrated in notebooks might even cross the 100 GB storage capacity mark. We believe that for all these advancements, achieving mainstream adoption will take quite a while as these devices might be available at exorbitant prices to the end-user, at least for some time to come.
  
Over the past few years, the notebook or laptop segment, has been one of the fastest-growing segments within the global PC industry.
  
The notebook market is replete with intense competition, with no one player exercising a clear-cut monopoly — although HP dominated the notebook market in 3Q 07, it received stiff competition from other players such as Dell, Acer, Lenovo, etc. Acer's impressive performance in the Asia-Pacific region and the European market has helped it to displace Dell from the second position. Also, Apple's inclination toward the notebook segment will likely intensify competition in the future.
  
Notebook uptake has witnessed growth among end-users in the past few years; experts predict that notebook PC shipments will likely overshadow desktop PC shipments in coming years too, owing to the notebook's benefit of portability.
  
Our partners at Analysts Perspectives present an overview of analyst observations, predictions, and opinions about competitive developments in the global notebook market.
  
Some key findings include in 4Q 07, HP, Dell, and Acer were the three leading vendors worldwide with market shares of 19.7 percent, 15.6 percent, and 13.7 percent respectively; Apple's share of the US PC market grew to almost 8 percent in 2007, making it the nation's third-largest PC vendor; and Global notebook PC shipments are expected to reach 135 million units for 2008.

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