Laptop sales to outpace analyst predictions, Intel says

Already hot sellers, laptops will represent an increasing percentage of PC sales in the coming years, exceeding analyst estimates, according to a senior Intel Corp. executive.

A combination of lower prices, longer battery life, and integrated wireless networking has helped spur sales of notebook computers over the last year. Sales will continue to rise as a result of improvements in technology attracting more users and a recovery in corporate spending, said Anand Chandrasekher, vice president and general manager of Intel's Mobile Platforms Group.

"I really believe the next cycle of (corporate PC) upgrades is going to be notebooks," Chandrasekher said.

Laptop sales have helped brighten the prospects of PC vendors. After languishing amidst a slowdown in demand that has lasted for more than two years, PC shipments have posted double-digit growth over the last two quarters, largely because of surging demand for notebooks, according to market analysts IDC and Gartner Inc. (IDC is a division of International Data Group Inc., parent company of IDG News Service). 

Rising laptop shipments are good news for vendors and hardware makers, like Taiwan's Quanta Computer Inc., one of the world's largest contract notebook makers.

Quanta is currently shipping around 1 million notebooks each month, with around 30,000 units leaving its factories every day, said T.J. Fang, an assistant vice president at Quanta, crediting Intel with helping to spur notebook demand.

"Because of Intel's Centrino, the notebook business is growing," Fang said, referring to Intel's Centrino package, which bundles a Pentium M processor with a wireless LAN chip set.

This increase in demand for notebooks has come despite a "depression" in corporate IT spending, Chandrasekher said. While corporate spending on IT has remained low, consumers have been snapping up laptops at rates that have never been seen before, he said.

Historically, corporations have accounted for around 70 percent of laptop sales, Chandrasekher said. However, sales this year have been almost evenly split between consumers and corporate buyers, he said. Chandrasekher expects to see notebook shipments once again tilt towards corporations in the coming years, with consumers accounting for around 40 percent of the market.

This shift will happen as corporations embark on a long-awaited cycle of PC upgrades, Chandrasekher said. These upgrades could happen soon, as the cost of maintaining PCs purchased in 1999 and 2000 rises and IT managers move to eliminate security holes that exist in Microsoft Corp.'s Windows 98 operating system, he said.

When that cycle of PC upgrades happens, Chandrasekher believes companies will buy more notebooks in a bid to raise the productivity of employees whose jobs are not tied to a single location.

IDC also foresees an increase in the percentage of overall PC shipments represented by notebook sales. Notebooks are expected to account for 25 percent of worldwide PC sales in 2003 and 27 percent in 2004, said Kitty Fok, director of personal systems research at IDC Asia-Pacific, noting this figure is expected to continue rising.

"In 2007, we are expecting notebook sales to account for 30 percent of the market," Fok said.