How Do You Categorize Notebooks?

Overview

The notebook computer market has become one of the remaining battlegrounds for computer manufacturers. The Intel-based server market has consolidated to four major manufacturers (Compaq, Dell, Hewlett-Packard, and IBM). The desktop PC market, although highly competitive, has seen similar consolidation, and the breadth of offerings has narrowed in recent years. The nearest thing to vitality here was the advent of two products: (1) the Internet/Information appliance, which is still in its formative stages, thus not yet a battleground; and (2) the super-low-price PC, epitomized by eMachines offerings. The eMachines model, however, is merely a pricing difference, not a technological one. This consigns it to the idea of gaining desktop market share through reduced prices/margins, which is (to us) not very interesting.

This brings us to the notebook/portable market. If handheld devices (Palm, Pocket PC, smart cell 'phones) are included, then this market has arguably the broadest range of product features. In this note, we will focus solely on the "traditional" notebook market.

Most users already understand that the term "notebook" encompasses a wide variety of features. Our purpose here is to define the notebook market segments, describe what the general characteristics of each segment are, and to give users an idea of what features they can expect for each segment.

Segments

It is popular to separate notebooks into such diverse and colorful classes as "Workhorse", "Leading Edge", "Ultralight", "Power", and so forth. While these descriptions certainly are eye-catching, we think the notebook market is more properly segmented into groups characterized either by their primary function, or by their general "class" of machine.

We believe this market can be broken down into four segments:

1. Desktop replacement
   
   
2. Highly mobile user
   
   
3. General-purpose machines
   
   
4. Very low-end machines

There is, of course, overlap between some of the segments, but there are also key differences. For a more detailed look at how we distinguish these segments, skip ahead to the "Segment Definitions" section. For those who want a little background on a notebook's feature set, continue reading here.

Features

Notebooks grew out of the desktop PC market, and thus are similar in many ways. However, there are some key technical and feature differences between the two types of computers:

Display: Because the display is integrated (vs. the mix-and-match aspect of desktops), its weight as a base system component is key. With a poor desktop monitor, you can just chuck it (or pass it on to someone else) and replace it with something better, for only a few hundred dollars extra. Obviously, this is not as easily accomplished with a notebook. All notebooks use LCD (Liquid Crystal Display) technology for their displays; the best current type is "active matrix TFT", other types include DSTN and HPA.

A related aspect is the graphics capability. As technology has improved, display resolution has increased to rival that of standard monitors, and manufacturers now install as much as 8 MB of Video RAM in their high-end machines.

Storage and Drives: Most desktops allow users to add one or more hard disk drives (HDDs) as their storage requirements increase. Until recently, notebooks did not allow this, so storage-heavy users were limited by how large a disk manufacturers could cram into the system, and hope an upgrade was possible as disk densities increased. However, more and more, we are seeing notebooks capable of housing a second HDD.

The space constraints of notebooks can lead to tradeoffs regarding which other drives are present in the system. A typical desktop will have floppy, CD/DVD, and often a DAT backup drive; notebooks often, but not always, have a combination CD/floppy module, which can sometimes be swapped out for a second HDD or a spare battery. Notebook backup drives are external, not internal.

CPU and Memory: Except for Apple's products, notebook computers primarily use CPUs based on Intel's x86 architecture. Whether manufactured by Intel or AMD, comparable processor classes will have comparable performance. The distinction will come from the class of processor: generally, low-end notebooks use Intel Celeron-class processors (or its equivalent), and the high-end notebooks will use Pentium III-class processors. However, these processors are generally not exactly the same as the CPUs found in comparable desktop systems - Intel generally uses the word "mobile" to indicate the processor.

RAM is as important in high-end notebooks as in desktops, and the maximum amount available is often similar. Bus speeds are usually comparable, although some desktop systems may be faster. The only significant difference is the physical packaging of the RAM modules, and this is not really a major issue.

Serviceability: Most current notebooks allow relatively easy swapping (or installing) of components, such as the battery, HDD, CD/floppy, and memory. The modularity of many notebooks allows the user to mix-and-match components as well. For example, a CD/floppy can be replaced by a spare battery or HDD. Desktops generally do not have this modularity.

Reliability: Because notebooks get knocked around a little more than desktops, and because general wear-and-tear on things such as keyboards (an integral part of the system) is greater than desktops, they run the risk of having their life shortened.

Adding to reliability issues is the prevalence of Windows 98 (vs. Windows NT). We have found Windows NT 4.0 to be a more robust and reliable OS than Windows 98. Manufacturers are starting to bundle NT (and Windows 2000) into systems more often than before, but they need to increase this practice further. (We are omitting Linux: even though Linux is considered to be a highly reliable OS, the dearth of key applications lead us to decide it is not yet ready as a notebook OS.)

Segment Definitions

For the purposes of this document, we will use the definitions below.

1. Desktop Replacement
   
   Target User: Corporate worker wanting computing power similar to a desktop. Not highly mobile, but wants to have the flexibility to bring his computer home to do work.
   
   Pricing: Generally more expensive than the desktops they replace. Typical pricing in the $2000-$3500 range,
   
   Typical Uses: Same as typical desktop - word processing/spreadsheet/office suite apps; E-mail; applications requiring power and speed, e.g., CAD/graphics
   
   Key Features: Large display; high performance; lots of disk space; good ergonomics; built-in NIC
   
   Additional Comments: Many users are finding that a powerful notebook with a 20GB hard drive is all they ever need
   
   Examples: Compaq Armada E-series, Dell Inspiron 7500, HP OmniBook 6000, IBM ThinkPad A series, Toshiba Tecra series
   
   
2. Highly Mobile User, a/k/a "Road Warrior"
   
   Target User: Sales/marketing professionals; consultants; executives who travel frequently.
   
   Pricing: Expect to pay in the $2000-$4500 range, in some cases even more
   
   Typical Uses: E-mail; remote connection; customer presentations
   
   Key Features: Low weight; long battery life; thin package; built-in modem
   
   Additional Comments: One of the Holy Grails is the ability to fly cross-country on one battery charge. This goal is getting closer.
   
   Examples: Compaq Armada M-series, Dell Latitude CPx, HP OmniBook 4150, IBM ThinkPad 570 and T series, Toshiba Portege series
   
   
3. General-purpose/Midrange Machines
   
   Target User: Business users wanting a mix of mid-range features, not needing the best/fastest/lightest of anything.
   
   Pricing: $1500-$2500
   
   Typical Uses: Word processing; spreadsheet; E-mail;
   
   Key Features: Mid-size display; good value without an abundance of bells-and-whistles
   
   Additional Comments: Where most of the market is currently focused, since it encompasses both business and home users fairly well.
   
   Examples: Compaq Prosignia series, Dell Latitude CPT, HP Pavilion N3190, IBM ThinkPad i series, Toshiba Satellite Pro series
   
   
4. Low-end Machines, a/k/a Value-priced a/k/a Budget
   
   Target User: Home users; non-power users; users without cash to burn
   
   Pricing: $1000 - $2000+
   
   Typical Uses: Basic applications, incl. word processing, reading e-mail
   
   Key Features: Small-to-medium-sized display; limited expandability; lower performance
   
   Additional Comments: As other technologies improve, there will be downward migration of high-end features into value products
   
   Examples: Compaq Notebook 100, Dell Inspiron 3800, HP Pavilion series, IBM ThinkPad i series, Toshiba Satellite series
   

Correlation Factors

Now that the segments have been defined, what features are important for a given segment? In Table 2, below, we list which factors are important in the different classes. Features marked with an "H" are very important to that particular class of notebook, "M" means the feature is of moderate importance, "L" means relatively low importance. For example, (low) weight is very important to a notebook for a highly mobile user, whereas it is less important to someone who wants a low-end/budget notebook.

Table 1. Correlation Factors for Different Notebook Classes

As can be seen, there is overlap as to which factors are important in "adjacent" classes. We do not expect this overlap to disappear anytime soon.

What Do You Get?

Now that we have discussed the segments and some of the features, we need to understand what we can expect to get when we buy a machine of a particular segment. Listed in Table 1 are some typical specs you can expect to find in a given notebook class. Generalizing is risky, so the specs shown should be used as guidelines rather than hard-and-fast rules.

Table 2. Typical Features for Different Notebook Classes

Note 1: Intel product names used for convenience. Advanced Micro (AMD) CPUs are also used
Note 2: Life as measured by ZD BatteryMark 3.0 test

As is the case with all hardware segments (server, desktop, notebook), the dividing lines between available features (by machine class) are not clear.

Outlook

As can be seen, the lines between many of the categories are becoming more blurred. As manufacturers continue to pack more features and functionality into their systems, this blurriness will increase.

Regarding which product is best suited for your needs:

Although it is "really cool" to have the thinnest, lightest notebook money can buy, it is also "really clear" that most users can get what they really need without paying for the extra whizziness. Be careful to avoid the buying-technology-for-its-own-sake syndrome.

Desktop replacement (DR) machines are gaining popularity, and we expect to see this segment become even more competitive in the coming one-two years. As with desktop PCs, users should get the best machine they can afford, since technology advances will quickly render today's high-end DR nearly obsolete in two years.

General-purpose/mid-range users have always had the greatest selection, and so must do more research to determine which model best suits there. We suggest looking for a good feature set combined with a good warranty and support package.

Low-end/value machines have been around for a while, but we believe this market is growing in popularity. As it fights off the challenge from handhelds, we expect to see more features packed into value machines. Users should look at "bang for the buck", i.e., value for your dollar, when selecting a low-end notebook. Another key consideration is warranty and support.

In summary: users should look primarily at the intended use (e.g., desktop replacement vs. mobile user), followed by price and features, when they are considering a notebook purchase.