Premium Notebooks: Objects of desire

As laptops replace desktops, the units most desired carry the tag “premium”.For buyers, they have the most features. For resellers, they have the most profit.
But if there’s one thing you quickly discover when asking vendors about their premium lines, it’s that each has their own definition of the subject.
They agree that the margins tend to be higher on high-end products, but aside from that, descriptions are all over the map. So trying to examine the top slice of the market is tricky.
Even Eddie Chan, an IDC Canada research analyst for mobile/personal computing and technology, notes, “the definition of ‘premium’ is pretty subjective.”
But there’s no doubt the notebook market as a whole is hot. IDC expects it to close out the year with a more than 30 per cent share of the total Canadian PC market; in Q2 2005 alone, sales leapt 40 per cent higher compared to the same period in 2004.
Neither IDC nor Forrester Research segment their laptop market figures for high-end products, but in our investigation of the segment we’ve pulled together some insight from industry experts and manufacturers to give computer dealers a sense of upcoming trends.
Ted Schadler, vice-president and principal analyst at Forrester Research, sees demand in premium models for two qualities: “Laptops that can handle 16:9 (screen ratio) video are increasingly popular as dorm room entertainment centers. This is clearly the sweet spot for products like Toshiba’s Qosmio,” he said.
“And laptops that are super portable, like the Dell Latitude X1, appeal to road warrior execs. Both of these will continue to force innovation by PC makers and entice consumers to buy at a premium.”
TTX Canada gets 10 to 15 per cent of its laptop business from very high-end models, according to Newman Ho, business development manager for notebooks and mobile computing. He defines premium products as those containing components like graphics cards with dedicated video memory, serial ATA (SATA) disk drives and DDR2 RAM.
HP, too, defines premium notebooks according to specialized components. Dedicated graphics memory, larger displays and faster 7,200 RPM hard drives distinguish its high-end systems.
“More premium notebooks will have more desktop-like features,” says Daniel Reio, product manager, commercial notebooks and Tablet PCs for HP Canada, He cited HP’s nx9600, with its “big burly P4” and 128 MB video memory, and its nw8240 workstation notebook as two systems fitting this category.

‘Unique technology’
Toshiba Canada product manager Jason Laxamana looks at premium systems as ones containing unique technology, or those used in unique ways.
The Qosmio line’s technical feature set, with its wide screen and SATA drives, makes it “a bit more expensive than average,” and the Satellite R10 Tablet’s protective features such as hard drive protection and bumper system similarly increase the price.
In Toshiba’s corporate line, Laxamana sees the Tecra and Portégé models as premium products, but added, “even corporate notebooks can’t hide from lower prices.”
Mark Bialic, president of Eurocom Corporation, defines a premium machine as something that’s above the standard specs, with dual hard drives, upgraded video and 64-bit processors.
“They’re very high-end, spec-wise, and have a lot of extra features that you may not need, but you want them,” he said.
Some of those “want-to-have” features in Eurocom systems include Webcams, multiple external ports, TV tuners, second optical drives and upgrades to 4 GB of RAM.
“One of the key features of premium products is that they’re designed to work for a very long time,” Bialic said. “(Like a classic car) you have to have the perfect balance of high performance and very good industrial design. Customers are paying more, but are getting much more.”
Lenovo’s view of premium machines is broader, said Ryan Wires, national sales specialist for Lenovo Canada. “We hold the belief that all of our products are premium.”
The feature set in a premium machine, to Wires, includes superior quality and value, security, reliability and ease of use.
That said, Lenovo does have higher-end systems in its portfolio, such as the ThinkPad T43P, a portable workstation that has been certified by vendors of CAD software, and an upcoming ThinkPad with wide screen that is launching in mid to late September.
Despite the desire, however, resellers should note there will be few significant launches in the category this fall. All vendors said major upgrades to their lines will come next year, after Intel’s next round of new chip releases.
Toshiba is perhaps the most active this year. Laxamana says it will offer systems with a bit more power and larger hard drives, and try to get its Tablet PC down to $2,000. A new line of Satellites with SATA drives will arrive in time for Christmas, and by then all Toshiba notebooks will have dual-layer DVD drives.
But its big news will come next year, when dual core processors become available. “The market doesn’t need a jumpstart,” Laxamana notes, “but this will bring something new for customers to get excited about.”
Ho said that by Q4, TTX will have discontinued Pentium 4 processors in favour of Intel’s mobile processors. Next year or beyond, he predicts, embedded cellular wireless (3G, GPRS or 1XRTT) will arrive, and notebooks will have swappable video cards instead of relying on a motherboard chipset.
HP is definitely looking at Intel’s new chipset and dual core processors, says Reio, with SATA drives making their way into notebooks in 2006.
Video memory in premium systems will be expanded to 256 MB as well, and he predicts that LightScribe optical drives, which will both write data and then print a label on the optical media, will become pervasive in HP’s notebooks.
However, no upgrades to the commercial lines are scheduled for the rest of this year.
Eurocom’s high-end workstations, the D900 Phantom and D700 Enigma, are already loaded with features, but Bialic said that September will bring a dual core model based on the AMD Athlon 64 X2 processor.

Big screen coming
Next year, Eurocom is upping the ante with a 19-in. screen, four physical hard drives and RAID 5 support.
“We always look at emerging markets,” he said. “The next market is the workstation market. We’re always looking for an R & D challenge; we’re not interested in making machines for Wal-Mart.”
“We want to have our R & D team designing a dream system, with a lot of things in it that can be discovered (by the customer) in years to come. It’s a nice thing to discover a feature on a system you’ve already bought.”
But for the premium notebook market to flourish, both manufacturers and resellers must play vital roles. “It’s important that companies try to educate (their resellers) about the difference between components (such as ATI video versus nVidia versus other lower performance chips, or different kinds of disk) and why it’s beneficial,” said Laxamana.
“And it’s important for retailers to be able to distinguish the difference (between components). In the short term, a low cost notebook may look like a good value, but in the long term it is not. It’s a tricky time for buying notebooks.”
“There’s a benefit for resellers to talk to customers about the higher end products,” noted Reio. “They make mor

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Lynn Greiner
Lynn Greiner
Lynn Greiner has been interpreting tech for businesses for over 20 years and has worked in the industry as well as writing about it, giving her a unique perspective into the issues companies face. She has both IT credentials and a business degree

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