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Dell Precision M90
Analysts see revenue from notebooks outpacing desktops in 2007

For the past few years, we've seen the rise of the notebook computer. The variety in the market has begun to expand, we've seen specifications that more favorably compare with their desktop brethren and we've seen prices come down to reasonable levels in the past year. You can often times find bargain-basement Compaq and HP notebooks going for around $400 after rebate in your local sales fliers or online -- granted these models typically come with 512MB of RAM and a Celeron processor, but it's enough to suit the needs of basic users.

While notebooks have been on the move in record numbers, desktop have been the bread and butter for most business customers due to pricing advantages. It looks as though 2007 may change all of that and major PC vendors like Dell and Hewlett-Packard will see notebooks as their dominant revenue generator for PCs rather than desktops. eWeek reports:

By the end of 2006, the estimated percentage of revenue for companies from desktops will be 47 percent, compared to 41.6 percent for notebooks. For 2007, the numbers will nearly flip, with 45.6 percent of revenue coming from notebooks and 43.1 percent from desktops, according to Farmer's estimates. Later, in 2008, notebooks will represent nearly 50 percent of revenue, while desktops will produce only about 40 percent of revenue.

The increase in revenue from notebook sales partly comes from the higher transaction prices. Whereas the average desktop computer in 2007 is expected to cost $767, the average notebook will cost nearly $1,100.

However, higher pricing is not the only reason for the shift. Over the past six years, sales of notebook computers have skyrocketed. The sales mix for notebook computers has nearly doubled from 18.7% in 2000 to 36% in 2006. That number is expected to grow to 44% in 2008.

Analysts are predicting that by the end of 2007, notebooks shipments will outpace desktop shipments in North America, Europe and Australia. Higher shipments coupled with higher transaction prices will be a big boon for companies like Dell and HP. HP has seen its revenue from notebooks increase by 24% for the fourth quarter. In comparison, desktop revenue has remained flat. Likewise, Dell has seen a 17% increase in revenue for notebooks and only a 5% increase for desktops.

There will, however, always be a place in the market for desktops. The enterprise market still heavily favors desktops and the lower transaction prices still entice many.

That being said, notebooks are a hot item these days and show no signs of slowdown. "I agree that there has been a real shift toward mobile computing and that shift really started in 2002. You have had a broadening of wireless Internet hotspots and that there has also been a group of professionals who have really turned to mobile computing. If the 1990s were the decade of the cell phone, then I think we are now in the decade of the notebook. In public spaces, from airports to hockey rinks, you see people typing away," said Charles King of Pund-IT Research.

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By archcommus on 12/20/2006 12:40:17 PM , Rating: 2
For your average consumer, a laptop indeed makes more sense. Portable and still gives you all the capabilities of your standard cheap desktop. So I wouldn't be surprised to see them out-sell desktops.

Someone like me, however, will never switch for his main system. TV/PVR functionality, 5.1 audio output, big screen and full keyboard, large hard drive, and upgrading components to stay current for games every 18-24 months - NUMEROUS reasons why a laptop just won't cut it. It'd be convenient for a few certain circumstances to supplement my desktop but that's about it.

RE: Understandable
By pugster on 12/20/2006 12:46:13 PM , Rating: 3
People don't like laptops because there are no standards in terms video cards, motherboard, keyboard, power supplies, batteries, and etc... in a laptops. I hope that the hardware manufacturers can standardize these things.

RE: Understandable
By therealnickdanger on 12/20/2006 1:51:26 PM , Rating: 2
For the most part, you're correct in that there aren't mainstream standards, but the level of parts-sharing between manufacturers makes upgrades and options much easier than you'd think. My Dell e1705, for example, has a pretty common 945-based mobo that can accept any mobile Core Solo, Core Duo, or Core 2 Duo. I also have the ability to add several different configurations of DDR2 up to 4GB as well as any SATA 2.5GB HDD or most of the slimline optical drives available. There are wholesalers that sell parts directly to Dell (and HP, Acer, etc.) where replacement fans, body kits, even LCDs can be ordered on the cheap. Since it uses an MXM slot for graphics, I can also replace my GPU with any other MXM GPU: ATI x1400-x1800, NVIDIA 7600-7950GTX, even FireGL or Quadro variants.

Granted, this is all very expensive, but it is all do-able.

RE: Understandable
By Pirks on 12/20/06, Rating: -1
RE: Understandable
By The Sword 88 on 12/20/2006 7:12:16 PM , Rating: 2
In an E1795 the GPU is sodder to the motherboard and cannot be easily replaced(I am not sure if it can at all) as for proc and memory and HDD yeah they are upgradable but not the GPU

RE: Understandable
By The Sword 88 on 12/20/2006 7:12:24 PM , Rating: 2
In an E1705 the GPU is sodder to the motherboard and cannot be easily replaced(I am not sure if it can at all) as for proc and memory and HDD yeah they are upgradable but not the GPU

RE: Understandable
By Pirks on 12/20/06, Rating: 0
RE: Understandable
By therealnickdanger on 12/21/2006 11:02:11 AM , Rating: 2
In an E1705 the GPU is sodder to the motherboard

That only applies to integrated graphics like the GMA950, X1300, GeForce 7400, and lower. I specifically stated MXM graphics cards. Walkthroughs with pictures are plentiful on any laptop-related forum.

RE: Understandable
By JeffDM on 12/21/2006 2:49:20 AM , Rating: 2
I don't know what people you are talking about, but notebook style computers outsell desktop computers.

RE: Understandable
By Aikouka on 12/20/2006 2:36:19 PM , Rating: 2
I agree whole heartidly, arch. There are just people in this world that will not be satisfied with what a laptop provides and that's typically a setup that you're "stuck with." That being said, a laptop can be a good compliment to a desktop.

I have a laptop that I use whenever I need to be away from my main machine, albeit it doesn't see too much use. It's just very hard to go from a machine like mine (C2D E6600 + 8800GTX) to my laptop (Turion 64 ML34 + Radeon M300 (I think that's the one)). I'm pondering the idea of selling it to buy a C2D laptop for the extra added umph, but I'm not sure if that'd be worth it with how much use it sees.

Is this bad news for AMD?
By Kuroyama on 12/20/2006 11:10:52 AM , Rating: 2
I've noticed AMD based notebooks appearing more often recently, but it still seems that the notebook market is still dominated by Intel much more than is the desktop market. Please correct me if I'm mistaken about market share, but I wonder if this shift towards laptops will be bad news for AMD.

RE: Is this bad news for AMD?
By lufoxe on 12/20/2006 11:55:07 AM , Rating: 2
the reason is simple, it's intel's marketing, it spreads the word much quicker. But I do have to admit, I like thier core series laptop CPUs. I've had both worlds, I bought an athlon 64M 3000+ on a gateway, and it was nice, but the laptop was too big, I just moved to a sony (yeah I know...) vaio with the centrino duo (core duo not core 2 :( ), and it lasts me a heck of alot longer in battery (6 hours compared to 3). So while I may be an AMD fan, I definately have to bow my head to intel on the mobile front. Maybe AMD should make a mobile processor from the ground up. I would think it could make some strides.

RE: Is this bad news for AMD?
By ADDAvenger on 12/20/2006 12:03:35 PM , Rating: 2
AMD is doing fine, they just released 65nm on desktop, and soon enough they'll have 65nm mobile chips and the field will be relatively even again. (I say relatively because K8 is still a generation behind C2D, although it does compare well to CD)

Also, about a mobile processor from the ground up:

RE: Is this bad news for AMD?
By Kuroyama on 12/20/2006 12:56:44 PM , Rating: 2
Producing a good CPU and getting it into computers are not the same thing. If it were then the Athlon XP would have outsold the Pentium, but it didn't by a long shot. In fact, the only Intel based computer I own is my laptop, because I couldn't find an AMD based lappy that fit my tastes at the time (Fall '05).

I don't get it ?
By kibets on 12/20/2006 11:14:58 AM , Rating: 4
I can not stand laptops - it is very unappealing to me to have my screen to be attached to the keyboard!

I like my 20" Dell monitor on the desk with a cheap keyboard where I can abuse the keys!

RE: I don't get it ?
By Mudvillager on 12/20/2006 11:48:17 AM , Rating: 2
Well you can attach your 20" Dell monitor and your cheap keyboard to a laptop also + you get the added portability, while also saving power and desktop space.

I'm surprised this shift hasn't come sooner - I'd estimate 95% of all users will do fine with a Celeron 512MB laptop.

RE: I don't get it ?
By ADDAvenger on 12/20/2006 11:59:08 AM , Rating: 2
I'd say 80% of users would fit that bill, but regardless you're right, it's all about convenience and ease of use. I kinda wish I had the power and upgradability of a desktop, but it simply wouldn't be worth it to trade this in for something that I can only use in my dorm. And I will admit that for the things I usually do with it while unplugged, a celly with half a gig really would work for me.

Just when...
By Dfere on 12/20/2006 11:21:33 AM , Rating: 1
The typical affordable notebook can run Windows XP.... What will Vista do to these numbers?

RE: Just when...
By therealnickdanger on 12/20/2006 12:12:31 PM , Rating: 2
I don't think it matters to the majority of users. You'd be suprised (or maybe not) how many people are content with a computer that is sluggish and unresponsive. Vista, sans Aero, runs just fine on slower PCs. Except for models with 256MB RAM, I'm pretty sure any current budget laptop can run Vista almost as well as XP. I've got some clunky old hardware kicking around that loaded the Vista Beta and ran OK... we'll see.

RE: Just when...
By KewlWhip on 12/20/2006 12:17:40 PM , Rating: 2
Vista will definitely push those numbers up. Vista has higher hardware requirements than XP (as XP had in relation to 2000). What concerns me is that the user experience for Vista will be so much different for users using a "bargain" laptop" and a "well equipped laptop". The Aero theme requires a decent video card which excludes the onboard video found on "bargain laptops". I used to be a "turn off the pretty stuff, I want the speed" but with Vista I enjoy the Aero theme.

-Vista RTM user

Avg consumers are the bulk of PC buyers
By MrX8503 on 12/20/2006 1:13:47 PM , Rating: 3
Well the bulk of PC buyers are the average consumer. The avg consumer doesnt require upgrades, are content with slow PCs, and only surf the web and write documents. So i can see why laptops would outsell desktops.

For the power user, a laptop isnt practical even if it is portable.

RE: Avg consumers are the bulk of PC buyers
By Pirks on 12/20/06, Rating: -1
By CascadingDarkness on 12/27/2006 7:16:37 PM , Rating: 2
Self-fulfilling prophecy, or douche-bag spewing gibberish?

Little of both I'd say. Comparing iMacs and mini macs to laptops is a big stretch to begin with, gibbering about time machines doesn't help the argument either, but I think the p.s. clinched the -1 for ya =).

See my other post on this article for my theory.

By Pandamonium on 12/20/2006 8:18:11 PM , Rating: 2
I concur. The enthusiast appeal of desktops is a) customizability, and b) power. The power delta between laptop and desktop isn't nearly as great as it once was, but the barrier to customizability is still pretty high. USB and Firewire give some extensions to laptops, but the limiting factor for me is still the video card. It's all too proprietary.

By AbuAli on 12/21/2006 5:31:02 PM , Rating: 2
There is some ways to standardise laptops, in fact huge amount of nootebooks are maked only from 3-4 companies in far east no mather u buy Dell or HP or Acer or any other, i tiping this on F-S amilo PI1536 and that is same laptop like Alienware arora m5550, diference is only in logo and other cosmetics and both have mxm graphic wich one is interchangeable with any other tipe II mxm module but there is a problem, no MXM modules on market.
what is reason for that? maby that is way to force me to buy new one istead of just change mxm graphic

Same ol'
By DigitalFreak on 12/20/2006 6:57:18 PM , Rating: 3
Notebooks Poised to Surge Ahead of Desktops in '07

Saw the same headline in '06
and '05
and '04

Surge in notebooks
By restrada on 12/20/2006 11:52:26 AM , Rating: 2
This does not surprise me at all. I too expect the popularity of notebooks to overtake desktops in the very near future. My local Best Buy had people camped out overnight for that Black Friday HP & Toshiba notebooks.

I believe it.
By yacoub on 12/20/2006 1:35:43 PM , Rating: 2
What folks like Dell really need to do, though, is reduce the triple-digit profit margins on upgrades for parts like RAM and GPU in order to make them more palatable and/or offer a better selection for items like the GPU.

It's off-putting to have to choose between:
*Spec out a decent system at Alienware but pay out the butt for it

*Suffer with weak GPU options, 512MB of RAM, a 5400rpm HD, and similar performance-impacting reductions just to get the price low enough to make it seem worthwhile.

Honestly, why even offer 6600-series graphics when you also offer 7600-series and even 7900-series on higher-end DTR laptops? Well the answer is so they can post the 6600-series price and then charge you a big markup to upgrade to the 7600-series and even more to get a 7900-series GPU.

I don't get it.
By Jesse Taylor on 12/20/2006 6:22:39 PM , Rating: 2
Dell has seen a 17% increase in revenue for desktops and only a 5% increase for desktops .

By 0uterlimitz on 12/20/2006 8:23:33 PM , Rating: 2
damn folks I think the purpose of the article was to inform people of the significant upward trend in consumer laptop purchases. Not about the cost of repair if you break one or if your "MXM" equipped unit is really equipped at all.

I think it's great that people are buying laptops. as people continue to buy them the technology therefore improves at a quicker pace (more R&D dollars?), which is good for everybody, desktop or laptop alike.

I use both personally..

Intel Needs Santa Rosa Quick
By porkster on 12/21/2006 12:43:07 AM , Rating: 2
The problem with notebooks/laptops is the graphics power. Without Santa Rosa the market satisfaction level could be hurt with the requirements needed for Vista.

Intel needs to get Santa Rosa chipset out as soon as possible and make it cheap.

By CascadingDarkness on 12/22/2006 6:34:14 PM , Rating: 2
I'm just taking a stab at my guess for this upswing in PC. I would say a part of this change (no idea how big a difference this would make) is due to geeks building their own computers. It is cake to build a pc by ordering the parts yourself and putting it together (usually cheaper too, to some extent). I have done it for a number of relatives.

But, do you really think I'm going to try and build laptop by ordering parts for my cousin? Heck no, I'm going to say go to dell's website (personal favorite, plz don't debate, go where you please). Once could barely call laptop components standardized. I mean memory and storage, but past that the field gets smaller.

Again, this is just my personal guess at what a portion of this change could be due to.

By leidegre on 12/27/2006 10:37:08 AM , Rating: 2
The amount of money put into a notebook, combined with the low performance per money ratio has to change first. Notebook sales sure go up, but for what reason and for what purposes?

I my self decided to not buy one, just becuase the preformance/money ratio wasn't good enough.

A lot of my friends have started to buy notebooks as well as desktops, but quickly realized that they have gained nothing but a comfort in being a bit more mobile.

2.5" 5400 rmp disks are still too slow for my liking, and I've been spoiled by SATA/RAID0 and Raptor disks for some time now, and wouldn't buy a notebook until the disk preformance improves, then again, I try to get around the problem with low-preforming notebooks through using a terminal server/client setup instead of expensive notebooks...

From a business perspective
By sprockkets on 12/20/2006 2:28:46 PM , Rating: 1
I just had a customer accidently trip on the power cord and break the power connector on the motherboard of the laptop, an Asus S62J. The fix? A new motherboard and labor for $375, for a laptop that costs about $575 for the whole shell, about $1000 for the whole thing assembled with all necessary parts.

My point? People are going to love how much people ask to repair these things, and then what will happen? They will just buy newer ones. Either it is good for computer techs, or it is not. I cannot see how they make them so cheap, except for subsidizing the low end with the high end.

For most people...laptop is ok
By AxemanFU on 12/20/06, Rating: 0
"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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