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Mobility – part one: a revealing look at laptop & tablet PCs

01 Jul 2008

Today’s fast-paced society demands technology keep up with ever-changing human mobility needs. The internet has been at the forefront of digital innovation since its public conception in the early 90s and has taken off with almost frightening speed. The freedom the internet has bought into the lives of many is the driving force behind the huge demand to access information, and pronto!Official figures show that New Zealand has one of the highest rates of internet access in the world. In 2002 it was ranked eighth in the OECD for number of internet users (per 10,000) and fifteenth for the number of PCs (per 100).This technology also extends into users’ personal lives as they become increasingly reliant on digital technologies for entertainment and communication. Laptops and tablet PCs are only a part of the ‘mobility’ solution, but this first feature in a two-part series will explore the current market opportunities and how to increase growth and please customers when it comes to mobile computer technologies.Major technological developments over the past yearConsumer and business customers alike are looking for better features and products to make them more mobile. A number of significant technological developments have improved the quality of notebooks, including extended battery life, widescreen monitors, miniaturisation, and greater memory capacity.However, a stand out advancement has been the introduction of the solid state drive (SSD). In simple terms, SSD is a data storage device designed with no moving parts, meaning it is generally more robust than a traditional hard drive, reducing the risk of mechanical failure. The technology has only recently been available to consumers and has a number of attractive advantages, including less power usage, faster data access and high reliability. Although already a feature in some notebook models, it is at present a substantially more expensive option than standard hard drives.Gary Wicks, New Zealand Country Manager for Toshiba, believes SSD is the way of the future. “The fantastic thing about SSD is it’s a fraction of the weight, which is very important in a notebook; it extends the battery life and it’s a bit faster too, so to me that’s quite significant.” Wicks predicts strong adoption by the general public over the next 12 months as the price reduces.Simon Molloy, HP’s Market Development Manager for Business Notebooks, acknowledges that SSD is, at this stage, an expensive option. “It’s definitely a technology we’re watching, but it’s very expensive; you’re paying 1,000% more per megabyte than you would a normal disk. It’s really aimed at the high end niche area where reliability is critical, especially in that ultra portable area.” HP is planning to introduce SSD across its whole business notebook range later this year as an option.Death of the desktop?According to Gartner, although it is more affordable to buy and maintain a desk-based system for many work places, the pricing of notebooks is declining and management techniques are improving. Gartner forecasts prices will continue to erode as slowing growth and ruthless price competition persists.Albert Liang, Notebook, Eee PC and Wireless Product Manager for ASUS, believes the difference between business and consumer needs is a “grey area”. “It’s getting bigger and bigger, because notebooks are so powerful these days; they can even replace a traditional desktop, so people can easily buy notebooks to do their work,” said Liang.Research shows that the shift toward notebooks is no longer just a corporate phenomenon, but rather it spans across a wide range of buyers. The workplace has become increasingly dependent on richer forms of computing and communication technologies. Pre-broadband days saw many users able to perform their jobs without access to the technology; however, these days even a brief period of network downtime can mean unproductive workers and upset residents.Thomas Tapsas, Intel’s ANZ Channel Manager, recognises that laptop technology is being widely adopted in many different areas that would traditionally have been desktop computer only. Mobile PC solutions are rapidly replacing static solutions across both the business and consumer markets.In New Zealand, miniature versions of fully functional notebooks, such as Cyclone Computer’s Classmate PC,  ASUS’ Eee PC and HP’s Mini-Note are attracting students and schools, as suitable, robust and portable PC solutions for children. Other key market areas that have not been traditionally strong for notebook sales are beginning to open up, such as the gaming market.  As laptops increase in power and functionality, more and more gamers are willing to move from a desktop PC.“In the second quarter 2006, laptop sales overtook desktop sales in New Zealand and have continued to do so. Consumers like the flexibility and convenience a notebook provides,” stated Tapsas.Gartner research shows laptop shipments have tripled since 2000 (from 6.4 million to 17.8 million), and have nearly doubled their share of total global PC shipments (from 17.5% share to 34.5% share). It is anticipated that these shipments will approach parity with desk-based units globally by 2010, and mobile PCs will outsell desk-based PCs in many mature markets, especially mature home markets.This growth is the result of the PC user base shifting toward younger users, namely the “video game, cell phone and MySpace generation” in the workforce. Data points to the diminishing role of stationary computing models, because users no longer see computing as a destination task, but rather as something that can be done at will.Users need technology that can be brought with them and used via wireless technology, which is “key to the mobile user,” explained Luke Ogier, Sales and Marketing Manager for distributor MEC. Lightweight laptops are gaining popularity for the mobile user as they can fit into tray tables in economy class, small cafe tables and smaller sized bags.“Notebooks are roughly 50% of all PC sales in NZ at this point; there is a big opportunity there. Notebooks have a higher sell price and generally better margin than a desktop, so there’s  actually quite a big opportunity there for converting people off desktops,” said Toshiba’s Gary Wick. “There’s a big mobility conversion opportunity.”Gartner — What you need to knowThe marketplace is constantly changing, and organisations must, consequently, prepare for greater numbers of mobile workers and plan accordingly. For optimum productivity returns:

  • Ensure that corporate IT trends are watched, and also monitor changing technologies in the consumer space.
  • Consider wireless connectivity that is strategic to mobile application initiatives.
  • Prepare for the increased technology demands of the upcoming workforce (younger workers who have grown up with technology give preference to jobs that offer up-to-date technology tools).
Tablet PCs in the marketplaceThe debate about whether the tablet PC is a niche market has industry experts offering different insights as to which way this technology is headed. There can be clear advantages to using a tablet over a laptop, especially in specialised areas such as health, education and retail, or when there is no table or flat surface to rest on.ASUS’ Liang believes the tablet still has not fit into the real portable market because of the weight of most tablets. “Most of them are easily 2kgs – 2.5kgs or more. If you hold that for half an hour, you’re going to have a pretty sore arm. I personally believe [they are still a niche market] because of the weight, size and the price,” he said. “If the technology improves, once the device gets smaller, and if they can fall below the $999 magic mark, then I’m sure they’ll pick up.”Lenovo’s New Zealand Distribution Channel Manager, James Arnold, agreed that tablets are heavier, mainly because of the technology in the screen. He believes tablets are really aimed at people who stand up a lot in their job, such as parking wardens, police and professionals who can’t hold a system and type into it.“Battery life is absolutely critical in tablets; you normally then will see low vault processors which use less power, and therefore, give you better battery life. The benefit of low vault processors is they give you longer battery life, but they don’t perform as well as a normal vault.“In a normal vault processor you get more grunt, but it consumes a lot more power so, therefore, a lot less battery life is available. So when you do a comparison, what you get is a slightly heavier, slightly more expensive lower performance system,” clarified Arnold.Admittedly, tablet PCs are not aimed at the general population, and a customer who wants an ultra portable option will want the best performance they can get in a light weight system — criteria not yet met by tablet PCs.“The tablet market is still very specialised; on average it’s less than 10% of the market. Touch screen tablets out sell Digitizer tablets 10 to one. It all comes down to the user’s workflow,” explained MEC’s Ogier.HP’s Molloy wouldn’t call it a niche market, believing instead that the tablet has grown in leaps and bounds since it first came onto the market. “Initially when it came out it was a very different device, but now it’s very much a notebook with tablet capability, so a lot of customers are buying a tablet, but they actually only use the tablet functionality rarely. They use the notebook most of the time, and then convert it into a tablet when they’re at a meeting or on a plane and they just want to browse emails or documents.”Molloy believes the strongest sales opportunities for a tablet are found in customers who are very pen orientated, often artistic people or people who record a lot of data which needs to be transferred back to an organisation straight away. Forms and data entry applications are a natural fit for the tablet and field work.“The big challenge is that every user is different; some people embrace tablet technology very willingly and aggressively, while others are quite wary, and deploying a tablet solution broadly through an organisation is quite challenging,” he said.Current market opportunitiesMonitoring market changes, conducting market or in-house research and spotting trends are primarily the basics when it comes to finding untapped opportunities.Lenovo’s Arnold admits untapped opportunities in the market these days are hard to find, especially in New Zealand, which he calls a very mature market. “There aren’t a lot of people out there that don’t have a computer.”Arnold believes tablets and education will provide a lot of up and coming opportunities: “I know of a number of universities in New Zealand that are doing studies right now, via professors as part of their thesis [sic], all about the use of tablets in education, and if we look overseas into the US and other markets, there’re amazing technologies that are becoming available for an incredible level for interactive learning that we just haven’t seen in any university or school to date.”Interactive classroom technology engages students and encourages them to be more involved in their learning. “You’re getting students effectively more engaged in what’s happening so this is one of the technology changes that we’re starting to see change, certainly in the US into universities, and I’d expect to see that sort of technology appearing down here. This technology is what a lot of universities are interested in,” Arnold went on to say.Ultra-mobile devices are another opportunity that can be tapped into; however, Stefan Nordbruch, Associate Analyst PC and Monitor Research for IDC New Zealand, believes these smaller devices, which emerged into the market at the end of last year, are not fully fledged laptops.Ultra-mobile devices are a technology IDC will closely monitor, and “we anticipate that they will become additional devices rather than taking share of traditional laptops,” said Nordbruch. He predicts the next two quarters will show a better picture of where the trend is going and who is using them and for what.“The question is how many people would want to work on an eight- or nine-inch screen, and in terms of performance, they are on the lower end as compared to what is available, so it’s more like an addition or for increased portability needs,” he explained.David Procter, Market Development Manager for Consumer Notebooks at HP NZ, said the vendor has experienced substantial growth on the consumer side because of the huge shift from desktop to notebook and listening to customer feedback.  “It’s really keeping up with consumers,” he said.Procter said HP takes the feedback it gets from its customers and retail partners seriously, which is one of the reasons it introduced different notebook designs. “We got the feedback that not everyone likes the standard black or the standard Compaq Presario grey. It’s really following those trends and looking at opportunities with partners to maximise not only the notebook sale, but also the add on selling – extra storage as an add on for customers who do want to have back up on the go, storage devices and other opportunities like that.”Consumer vs. corporateThere are many differences between what a consumer and a business customer want and need. Lenovo’s Arnold told The Channel that it is imperative to look at the usage patterns of each. With consumers it is all about technology being slightly different from the rest in terms of its look and feel. “In terms of usage patterns, consumers are typically downloading multimedia on the internet,” he explained. “So obviously in a consumer system you want good graphics to drive that video capability, you want good speakers and good audio card.”However, in the corporate market black systems are very popular. Corporate users are very simple; they use laptops for long hours, they want good battery life and the technology needs to be tough and mobile.Consumers want the most features for the lowest price possible. “They don’t want an unreliable product, but they’re happy to accept a slightly lower quality product with more performance and more features,” said Toshiba’s Wicks.Tim Falinksi, Regional Sales Director Australasia for NEC Computers, knows although business users are concerned with function over form they can be “wooed” with features like dedicated port replicators, models that are tough but also light weight. He also believes business users have a more legitimate requirement for a laptop with Windows XP, whereas consumers are more heavily influenced by what their peers suggest.“We have found in a retail environment consumers can be influenced by large HDD and RAM numbers, as well as dedicated graphics and strong backup and support options. Particularly local customer support centres and on-site warranty,” said Falinski.Business users like to be prepared when it comes to change. Carefully approaching the introduction of new products by giving lots of warning will help smooth out the transition process.HP’s Molloy believes there is no clear delineation between the two; however, stability is one of the stand-out differences between consumer and business users: “Particularly in the largest corporations, the cost of actually changing something like a notebook standard is quite big, in terms of the impact on the business. There’s a real cost involved in doing that. You could end up with a huge variety of notebooks in the organisation which complicate support and make management quite complex, as many customers try to avoid as many changes a possible.”Overall, notebook and tablet PC sales show no sign of slowing down, with both general consumers and high-level business users seeking dependable solutions to enhance their mobility needs. Simply put, it really comes down to understanding what that user wants out of their notebook or tablet PC.