Paul and all, Article...Mobile-computing Market Is Aglow With New Technology -- New processors, video controllers, and core logic are expected to spark strong notebook sales
September 22, 1999
ELECTRONIC BUYERS NEWS : The notebook market is vibrant and continues to grow as manufacturers break ground with new designs. Fanning the fires of demand are corporate users' increasing appetite for near-desktop functionality and the desire for go-anywhere features among consumers, who are adopting notebooks in record numbers.
According to International Data Corp. (IDC) estimates, 19.2 million notebooks will be sold this year. Worldwide shipments will increase 15.7% next year, to 22.3 million units, and 13.2%, to 25.2 million, in 2001.
On the bright side are new processors, video controllers, and core logic. Consumers are also increasingly attracted to thinner, lighter machines.
But dimming the short-term outlook for new notebooks is the availability of LCD panels. In fact, some analysts say the panel shortage could stall growth.
Processor spotlight
Market trackers' eyes are trained on Intel Corp., which holds a 90% share of the notebook-processor market. And the microprocessor giant's stake is apt to increase.
Intel's mobile Pentium II family has been rounded out with the Celeron in the past year, and in late October the company will increase its stable of processors for its first Pentium III products designed for portables.
The second part of Intel's mobile Pentium III assault will surface as early as January. Based on Pentium III logic and 0.18-micron geometry, this new processor incorporates a feature set code-named Geyserville.
At the heart of this technology is the ability to drive a mobile Pentium III at two speeds. When the CPU is pulling current from a notebook's battery, it operates at the lower speed (which protects battery life and reduces thermal problems). When powered by AC current, Geyserville CPUs clock up to a faster speed.
The initial release of Geyserville is likely to sport speeds of either 450/500 MHz or 500/600 MHz, according to sources close to Intel.
Officials at the Santa Clara, Calif.-based company declined to comment on the reports.
Not everyone is happy with the forthcoming mobile Pentium III processors. In fact, some notebook designers are wondering why Intel seems unable to provide clock-speed parity between its mobile (which will reportedly top out at 500 MHz this year) and desktop product lines (expected to rocket to 600 and perhaps 750 MHz).
Clock-speed parity between desktop and mobile computers has become an important component in the development, marketing, and sales of corporate notebooks, according to notebook executives. However, by mid-2000, most notebook makers expect to offer portables with dual-speed CPUs that run as fast as 750 MHz.
While such speeds test thermal-management limits, designers say they're more concerned with managing the thermal characteristics of parts such as Intel's 466-MHz Celeron processor, which, according to one designer, "pushes the thermal envelope to the max."
Although Advanced Micro Devices Inc., Sunnyvale, Calif., has garnered a small share of the notebook-processor market, the chip maker is faring well in the consumer segment of that market. AMD offers a mobile version of the K6-2 with a clock speed of 300 MHz, and a mobile version of the K6-III with a clock speed of 380 MHz.
AMD is expected to introduce faster versions of both processors in the coming months, but company officials declined to provide additional information.
New forms
The introduction of portable Pentium IIIs, however, will usher in a generation of high-end configurations that, while lacking the clock rates of desktop CPUs, make them near replacements. Specifically, most designers say they will use the Pentium III to launch notebooks with 64 Mbytes (and in some cases 128 Mbytes) of memory, hard drives with capacities of up to 25 Gbytes, and 3D-based video subsystems with 16 Mbytes or more of memory.
Demand for less-expensive notebooks remains high. And companies such as IBM, Sony, Toshiba, and, more recently, Apple are using the sub-$2,000 space to pioneer models with older-generation components.
Consumer reaction to such machines has been positive, and the segment is growing, according to analyst Martin Reynolds at Dataquest Inc., San Jose.
However, a growing number of consumers are attracted to thin, light notebooks. The form factor was made popular by Japan's Sony Corp., with its Vaio 505, a sub-three-pound computer introduced nearly two years ago with an MMX processor, 2-Gbyte hard drive, and a 32-Mbyte memory footprint.
Lighter fare
Only about 2.08 million thin, light computers (representing about 11% of the market) will be sold this year. But demand is projected to reach 22.4 million units, or more than 15% of the market, in 2001, according to IDC, Framingham, Mass.
"Thin and lights forced notebook makers to pay attention to design, and going forward, that's important," said Randy Giusto, vice president of desktop and portable computers at IDC. "Although this segment currently represents less than 10% of the market and will grow to only 12% in the coming years, most notebook makers want to play in the thin and light market."
Dataquest's Reynolds also stressed the importance of good design. "In the future, the companies that will be successful are those significantly involved in the designs of their machines. ... If you want to be successful in thin and lights, you need to enlist [top-flight] designers," Reynolds said.
New controllers
The new Intel processors' introduction is also expected to herald a shift in video controllers used in corporate notebooks. The winner in this space is S3 Inc., whose Savage IX and MX controllers are thought to have space on the motherboards of at least five new Coppermine Pentium III notebooks.
The reason for the shift, according to notebook designers and S3's marketing managers, is the growing use of corporate notebooks to replace desktops. In this new role, notebooks are being called on to run 3D and other high-end graphics programs and deliver performance roughly comparable to some desktops.
The move to offer large amounts of video memory is accelerating-most notebook makers plan to support at least 16 Mbytes of on-board video memory by mid-2000, reports Carrell Killabrew, marketing manager for portable products at S3, Santa Clara, Calif.
Two other video-related issues-the rapid acceptance of hardware-assisted DVD and the need to support corporate and technical users who run display applications on multiple monitors simultaneously-also contribute to the growth of notebook video controllers that rival those found on some desktops, Killabrew added.
Uncertainty about core logic
New core logic from Intel has more than a few notebook designers worried. One of the biggest unknowns for engineers working on new machines, particularly those who will use Intel's dual-speed mobile processors, is the features that will be incorporated into Intel's new core logic, code-named Greendale.
In addition to adding support for front-side bus and high-speed memory technologies, Greendale could also lock notebook makers into using an integrated graphics controller, a strategy many designers find objectionable.
To make sure options remain open, several notebook vendors are exploring Via Technology Inc.'s core logic, or say they may roll their own hybrids in future products (a strategy developed by Toshiba in the last several years).
Graphics performance has become so important among suppliers of corporate notebooks used as desktop replacements that they are a major selling point, according to analysts.
Designing for future communications
Integrating communications into notebook designs should also be high on the list of any notebook supplier that wants to sell to mainstream U.S. or European markets, analysts contend.
One term stands out like a beacon to anyone who wants to sell into the European market next year: Bluetooth, a wireless technology designed to enable users to communicate with other comparably equipped devices. More than 800 companies have bought into the Bluetooth Consortium's specification worldwide, and support keeps growing.
Because European and Asian cell-phone technologies are fairly advanced, Bluetooth will be more important in the short term to notebook makers vying for sales offshore than to those catering to the domestic market, Dataquest's Reynolds said. But in 2001, that will change: Bluetooth could make or break a product aimed at U.S. corporate notebook makers, he said.
The technology is expected to add about $15 to $20 to the cost of building notebooks, and will allow units equipped with transceivers to communicate seamlessly with devices as diverse as small-work-group wireless networks and cell phones.
Bringing 'em home
What's the next stop for the venerable laptop? Desktops in upscale homes, offices, and other workspaces.
Manufacturers such as NEC and Sony are repackaging core notebook designs that marry a small system case to an upright LCD monitor to attract savvy consumers and professionals who value desktop real estate or design above other factors. Sony's PCV-L600 Vaio and NEC's PowerMate 2000 may be the shape of things to come.
Their configurations include a high-performance Pentium II processor, CD- or DVD-ROM drive, a 6.4-Gbyte or higher-capacity hard drive, a floppy disk drive, a 3D graphics accelerator with 4 Mbytes of memory, 64 Mbytes of system memory, and an integrated modem or LAN adapter.
Although at about $1,800 the company is pricing its repackaged portable lower than some comparably equipped notebooks, other manufacturers in this camp are pricing their machines in the $2,499 range. Sales of the new form factor have been greater than expected.
Designers working with portable and desktop computer makers are pushing the new form factor, which they believe could represent the next big opportunity for notebook manufacturers that want to tap new markets. But analysts believe that rising LCD-screen prices and plummeting availability will hurt this segment.
Display shortage
A combination of high demand for large (13.3-, 14.1-, and 15-in.) LCD screens and manufacturing problems at some suppliers is squeezing supply.
"While vendors may act like there's no problem, panel makers are saying there's no way that they can make enough panels to satisfy demand, IDC's Giusto said. "The reality is that the [notebook] market could, and will, flatten until after the panel problem is over."
Most notebook makers have been caught off guard and may find themselves scrambling to get parts through the end of next year-and perhaps into early 2001, Giusto added.
The panel shortage could affect thin and wides, value-class machines with 15-in. panels, and hybrid notebooks configured as compact desktops, according to market trackers.
While limited panel availability may put the skids on the business plans of some notebooks makers that last year developed products with 14- and 15-in. screens, the shortage could buoy margins on mainstream corporate notebooks, particularly those that will use Intel's mobile Pentium III processor, which is expected to ship in the fourth quarter.
Corporate notebooks are the bread and butter of today's market, accounting for up to 70% of all systems sold, according to analysts.
-Jim Forbes, based in San Mateo, Calif., is executive editor of DemoLetter, a newsletter covering the mobile-computing market.
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