CES Trend #5: Notebooks becoming the PC of choice

At CES 2008 next week, manufacturers won't be showing off hot new desktops; instead, sleek new notebooks will take center stage. In the United States, notebooks are already outpacing desktop PC sales by a small margin and it won't be much longer before the rest of the world catches up.

The desktop market peaked in the United States in 2006, but with growth in developing markets continuing, it will take a while longer for the market to peak elsewhere. Research firms seem to agree that this will happen sometime around the end of the decade, when notebook sales will eclipse desktops in combined worldwide shipments.

Even in developing markets the notebook will see added traction. Low-cost options such as the OLPC XO Laptop and Intel's Classmate PC will spur notebook use among school-aged children and their families. And falling prices of typical notebooks themselves could also help to attract consumers in developing nations.

An emphasis on portability

With consumers buying more laptops and less desktops, it's not surprising for computer manufacturers to be refocusing on the portable market. While the US only counts a portion of global sales, the country's size is significant enough to alter their strategies.

At CES, this trend will undoubtedly continue, as well as during Macworld a week later. Apple is rumored to be preparing to launch an even smaller sub-notebook. The emphasis will be on portability, which seems to be the biggest reason consumers are opting for notebooks in this age of Wi-Fi hotspots and 3G wireless broadband.

According to IC Insights, notebooks this year will make up 42 percent of worldwide shipments. This will grow to 47 percent in 2009, near parity in 2010, and 54 percent in 2011.

IDC numbers tell a similar story, with the research firm adding that it believes that portables could make up two-thirds of the PC market in the United States by 2011.

During this same period, the entire market will have grown an estimated 25 percent, or about 7 percent per year, a far cry from the double digit growth of years past. In turn, putting a greater emphasis on notebooks in 2008 and beyond is a logical step for targeting new customers.

More desktop-like functions make notebooks viable

For many years, while laptops served as useful companions to desktop PCs, a number of drawbacks limited adoption, such as storage and speed. But these roadblocks are being removed thanks to new technologies, with notebooks frequently outperforming equally-priced desktops.

Take for example hard drive space. In this age of downloadable media, hard disks measured in the hundreds of gigabytes are becoming all but a necessity in any home computer system. Such capacities have finally reached notebooks, with Seagate and Western Digital now shipping 320GB 2.5-inch drives.

Hitachi took portable storage a step further Thursday, with the debut of a 500GB hard drive for notebook system. While it's not compatible with all form factors, this is the size many consumers are clamoring for in order to hold all their digital media.

Another drawback to the laptop now on its way out is performance. Before, size considerations prevented manufacturers from using high-end chips in portable computers. With new technologies allowing the shrinking of components -- and the capability to keep them running cool -- portable processors can be nearly as fast as those in big, clunky desktops.

Gaming was previously a big problem on portable systems for similar reasons; laptops didn't have the graphics capability to power the latest games. This is changing, however, with both ATI and NVidia introducing mobile chipsets that can handle nearly everything thrown at them. HP and Dell have introduced gaming-specific laptops that offer portability to those needing their Halo fix.

New standard technologies such as DVI connections and multiple USB ports mean the portables can also function like a desktop when needed. Even Web cams are being integrated into the latest notebook models from manufacturers such as Apple, Dell and Sony.

Falling prices

Perhaps the biggest reason behind consumers purchasing notebooks in lieu of desktops is cost. Just a few years ago, fully-capable laptops were priced close to $2,000 while desktops could be had for nearly half that figure. But many notebooks -- even those from Apple -- can presently be purchased for $1,000 or cheaper, making them affordable to a whole new class of consumer.

In turn, notebooks are filling display shelves at retailers while bulky PCs take a back seat. Dell recently inked a deal to display its laptops -- which start at $499 USD -- at Best Buy in order to compete with a growing number of low-cost models from Acer, HP and Toshiba.

Chinese manufacturer Lenovo, which purchased IBM's business-oriented ThinkPad line, is even getting into the consumer notebook game with its new IdeaPad models that will be the company's central focus during CES next week. The starting price of the low-end IdeaPad is just $800, more than affordable for most buyers.

CES will be a launching point for new notebook models from a number of manufacturers as competition continues to heat up in the space. Slimmer and sleeker will be the watchwords of the show, all while packing in more features ranging from 3G broadband to webcams to high-definition displays and HD disc drives. Check back next week for the latest news and product galleries.