Notice more so-called "desktop replacement" notebooks on the market these days? It's not your imagination. Vendors
are encouraging enterprises to replace desktop PCs with more profitable notebook models, but that doesn't necessarily mean it's a good idea.
Computer makers Dell Inc., Acer Inc., Sharp Systems of America Inc. and Toshiba America Inc. all offer various notebooks that are intended to displace the desktop machines that have been familiar fixtures in enterprises for more than a decade.
Simon Yates, senior analyst with Forrester Research in Cambridge, Mass., said that notebooks have comprised about 20% of the enterprise PC market over the past year, and that percentage will rise over the next few years.
"Users are demanding greater mobility," said Yates. "And there's really no need to have a giant gray [PC] sitting by your desk."
Since it's difficult to shrink certain computer components for use in notebooks, they have typically trailed desktops in key performance categories, such as processor speed, hard drive space and video capabilities. That's also why notebooks are usually more expensive.
However, that's quickly changing. Yates said that a high-end desktop PC costs about $800 without a monitor, and a comparable notebook computer is a few hundred more. "But mobile technology is advancing and improving a lot faster than desktop technology," he said.
Ketan Pandya, a marketing manager for Dell, said notebooks are gaining in popularity because of the benefits they offer, such as increased mobility and wireless connectivity.
"It's just not that easy to put a wireless card in your desktop and roll it from room to room," Pandya said. "You can take a notebook to a cafÉ or a conference room," he said, and still stay connected.
Yet there's a secret that enters into the equation as well: Vendors can make larger profits from notebooks than from desktops. Yates said while most desktops have become commoditized and aren't that different from one another, notebook models still vary considerably.
"By encouraging different [notebook] form factors, the vendors are negotiating on a whole bunch of different factors -- weight, screen size, processor speed," Yates said, and when there are more factors to negotiate, that means more ways to increase profit margins.
So should your next batch of new PCs be notebooks, or are desktops still worth their weight? Yates suggested avoiding the temptation to buy a large number of "one-size-fits-all laptops," because the diversity in the enterprise notebook market has created more opportunities to buy systems that suit the usage needs of individuals.
"Consider buying all of your notebooks from a single vendor," added Yates, because it will provide more negotiating leverage.
Finally, Yates said that when Microsoft releases its Longhorn operating system in late 2006 or early 2007, it's going to require all new hardware -- today's hardware won't be powerful enough to run it. He said enterprises should not only buy enough systems today to last until the Longhorn refresh cycle beings, but also experiment with more non-traditional PCs like Linux notebooks and blade PCs.
"The bottom line is that the desktop PC as we know it today is on the decline quite rapidly, but it's not necessarily going to be replaced by notebooks," said Yates. "There are other alternatives to the desktop that are out there that are going to take off."
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