Desktop and Notebook Merge into... a Desknote

It looks like a notebook, it runs like a notebook and you carry it

around like a notebook. But at a typical price of around US$1,000, it

sure doesn't burn a hole in your pocket like a notebook.

The beast in question is known as a Desknote, the brainchild of a Taipei

company called Elitegroup Computer Systems Co. Ltd., which is betting

that users will buy into its philosophy of a portable computer at a

desktop price.

The company is gambling that the Desknote line of portable computers

could reshape the way that users and vendors think about notebook PCs,

and preliminary research from IDC suggests it might be right.

At first glance, the Desknote looks like a notebook PC, but there's a

difference: it isn't designed for power-free use and so isn't equipped

with an internal battery and uses the desktop version of processors from

Intel Corp. and Advanced Micro Devices Inc. (AMD).

The absence of an internal battery shouldn't be much of a drawback for

most users. Weighing in at nearly six pounds, the Desknote is likely to

spend most of its time on a desk rather than on the road. For users that

need battery power, Elitegroup offers external battery packs and car

chargers as optional accessories.

Despite the lack of a battery, the Desknote's combination of high-end

components and low price could very well take sales from other notebooks

that primarily function as desktop replacements, including more

expensive high-end models like Dell Computer Corp.'s Latitude C840


Boasting a 2GHz Mobile Pentium 4 processor from Intel Corp., the C840

offers high- end features that other notebooks don't: a 15-inch TFT-LCD

(thin film transistor liquid crystal display) screen, 256M bytes of DDR

(double data rate) SDRAM (synchronous dynamic RAM), an 8X DVD drive, and

a 20G-byte hard disk.

But there are drawbacks to buying a notebook like the C840. Weighing in

at 7.4 pounds, it isn't built for users who travel frequently or plan to

carry their laptop around with them on a daily basis. That means that

users are less likely to rely on the notebook's battery, and minimizes

its advantage over the Desknote.

The C840 and other high-end notebooks don't come cheap. Notebook

components, like the mobile version of the Pentium 4, come at a hefty

premium to their desktop counterparts. For example, the 2GHz Mobile

Pentium 4 costs US$637, more than three times the $193 price of the 2GHz

desktop chip. No surprise then that the C840 carries a heavyweight price

of $2,495.

And then there is the question of availability. Intel introduced the

2GHz Mobile Pentium 4 on June 24 while the desktop version has been

around since Aug. 27, 2001. The Desknote offers an alternative for those

who don't feel like waiting a year to get the same level of performance

as a desktop and don't want to pay extra for the privilege.

By using desktop versions of chips like the Pentium 4 and other

components, Elitegroup is able to match the specs of high-end notebooks

like the C840 at a steep discount: a 2GHz Pentium 4-based Desknote costs

around $1,200, or less, depending on the exact configuration. You can

even get a Desknote running the 2.8GHz Pentium 4 if you want an added

boost in performance.

With specs and prices like that, it's no wonder that users in Asia are

starting to warm to the Desknote.

During the first half of this year, Desknote sales in Asia, excluding

Japan, reached 43,000 units, with sales primarily in China, the

Philippines and Taiwan, according to Kitty Fok, research director at IDC

Asia-Pacific. They're even popping up for sale in more developed Asian

markets, like technologically advanced Singapore.

So far, the Desknote represents a small percentage of the 1.49 million

notebooks sold in Asia during the same period, according to IDC, but

these numbers should be enough to make major notebook vendors take

notice -- especially if Desknote sales continue to increase and the

large price gap remains between notebook components and their desktop


Signs indicate that interest in Desknote-like machines is already

building among vendors in emerging markets like China. Legend Group

Ltd., for example, has developed a Desknote-like notebook that will hit

the market in the coming months, Fok said. If sales continue to

increase, could vendors in the U.S. and elsewhere be far behind?

The Desknote is perhaps less of a gamble than it looks. After all, this

is Taiwan, full of business-savvy manufacturing companies that have

proven time and again that they can turn a profit making large volumes

of high-quality products at low prices under contract for vendors in the

U.S. and elsewhere.

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