Desktop and Notebook Merge into... a Desknote

by Sumner Lemon

August 28, 2002 —

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.

ITworld