How long before we all have a notebook?
IBM Predicts Its Notebook Under $1,200 by Year's End
By Doug Olenick
New York
Issue 200, Mon., March 9, 1998
IBM, after arriving late to the sub-$1,000 desktop PC party last year, has no plans to miss the booming low-priced notebook market.
Last week the company said it expects prices to hit $1,200 by year's end.
The IBM prediction comes as the company rolls out a consumer-focused line of ThinkPads to retailers, and as Compaq lowers prices on Armada and Presario notebooks, to $999 and $1,499 respectively. Intel is reported to be exploring lower-cost microprocessors for notebooks, with launch plans as early as 1999.
Lower pricing could polarize the market when high-end Pentium II-based notebooks hit this spring. But some said Big Blue may arrive too early for a fall 1998 low-end notebook bash. Toshiba and Fujitsu separately said they expect prices for entry-level products to remain in the $1,500 to $1,600 range, though customers will get better products at those price points.
Before year end, IBM expects to hit the $1,200 level for a fully loaded, Pentium 166MHz-powered notebook with MMX technology, now priced between $1,500 and $1,700, said Brian Dalgetty, marketing director for IBM's consumer mobile products. "We will see fairly significant drops, just like the PC experienced last year," he said. "And these prices are for powerful notebooks, not for end-of-life product."
The new ThinkPad line includes the 310ED, the company's lowest-priced entry-level model to date. The new offerings are part of an attempt to raise consumer purchases of ThinkPads past the current 20 percent mark.
The ThinkPad 310ED features a Pentium 166MHz MMX processor, 2.1GB hard drive and 32MB of RAM, at a $1,599 street price. The 385XD series, two ThinkPad models costing $2,499 and $2,999, also started shipping, but target the higher-end, business consumer.
Compaq also jumped into the fray by pricing its Presario 1215 at $1,499. "That product will be hot," said one retail buyer who requested anonymity.
A $1,200 price point could be reached in six months, said Josh Council, notebook analyst for ARS, Irving, Texas.
But Toshiba views the current trend as "a compression," said Michael Stimson, senior director for Toshiba's product marketing. "The bottom line is staying at $1,500, but what you get for $1,500 will improve dramatically." This will primarily mean more processor power and hard-drive space, he added.
At the same time, Toshiba has been driving to lower price points. It recently dropped the price on the Satellite 460CDX Pentium 166MHz to $1,799 from $2,049, and rolled back the price on the Satellite Pentium 133MHz 440CDT by $200, to $1,399.
Bert Parekh, Fujitsu's director of product marketing, sees prices falling to the $1,400 to $1,500 range for an entry- level notebook, but no lower.
In late February Fujitsu began shipping its contribution, the LifeBook 765Dx, powered by a 166MHz processor with MMX technology. The notebook has a $1,499 street price.
Nearly all vendors agreed on two points: notebooks at lower price levels will draw new consumers to stores, and prices would stop short of desktops' sub-$1,000 price points-Compaq's Armada notwithstanding.
IBM's efforts to sell more low-priced notebooks to general consumers is based on company research indicating that consumers will not spend more than $1,999 for a notebook.
Toshiba's Stimson said lower price points in general will attract more customers, adding, "What we'd love to see are more home users. People want a computer they can move from room to room."
But, cautioned Fujitsu's Parekh, "$999 is just too aggressive right now."
Meanwhile, the downward pricing pressure doesn't bode well for higher-end notebooks due out this spring.
Indeed, despite the need for higher-powered processors, there is little demand so far for the upcoming Pentium II-powered notebooks. "[Nobody is] screaming for Pentium II machines. What they are asking for is 233MHz and 266MHz machines," said Wally Raymond, vice president, sales and marketing, Lap-Top Superstores, Natick, Mass. |
