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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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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.





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