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 notebook.

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 counterparts.

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.