Faster notebooks target bigger spenders

Intel chases high-end users with its new mobile Pentium IIIs, the fastest chips ever for notebook PCs. And the retail "sweet spot" is on the rise
Written by John G.Spooner, Contributor

Intel will release its fastest chips ever for notebook PCs later this month. With consumers suddenly willing to pay more to get more, the timing is right.

The Santa Clara, California, chip maker plans to announce a trio of faster mobile Pentium III and Celeron processors -- including its 800MHz, the top-speed 850MHz mobile Pentium III processors with SpeedStep Technology and its 700MHz mobile Celeron chip -- on September 25, sources said.

Instead of buying low-cost notebooks with less memory and cheaper dual-scan screens, consumers are opting to pay a little extra for fully featured notebooks, said Steve Andler, vice president of PC marketing for Toshiba America Information Systems Inc.

They are even paying a higher price for machines without the fastest Intel or Advanced Micro Devices processors on the market.

Consumers want notebooks with DVD drives, larger active-matrix screens and plenty of memory, rather than low prices and faster clock speeds, he said. As a result, the "sweet spot" in the retail market has risen from roughly $1,200 to $1,700.

"People aren't pushing for cheaper notebooks. The reality is that people are buying DVD, whether they need it or not," Andler said. At the same time, "We've hit a level of (clock speed) performance that they think is acceptable."

Analysts agree that the consumer market is shifting. "Consumers are buying up the curve, because they want more features," said Randy Guisto, an analyst at International Data Corporation. However, Guisto said, "You can't make that statement for the whole market."

Purchasing habits in corporate market are virtually unchanged, he said. Businesses typically buy notebooks that range from $2,600 to $4,000 and are equipped with faster Pentium III processors.

"If you look at the entire market, the mainstream notebook user is still someone who buys in the middle of the price range, so they're buying machines that are priced around $1,999," Guisto said. "Typically, the mainstream notebook buyer uses (Microsoft) Office, mail and surfs the Web, and they're plugged in a large majority of the time."

Many of them either run or work for small- or medium-sized businesses and use notebooks as "work extenders," meaning they take notebook PCs home at night to work extra hours after work, Guisto said. "That's what's really grown the market in the last four years."

Many of those users are looking for more power for multimedia applications, he added. "That always requires more: more clock speed, more memory and more video RAM," Guisto said. For that reason, "People will continue to buy high-end notebook chips."

A fair number of PC makers will offer the new mobile Pentium III and Celeron chips from Intel.

Toshiba, for example, is expected to introduce several new notebooks at the end of the month. One, a Satellite, will address the new market, offering a DVD drive for about $1,700, while a new high-end Tecra 8100 model will offer the newest Pentium III chips for about $3,500.

Other notebook PC vendors, including Dell and Hewlett-Packard, are expected to join it with new notebooks of their own, once Intel announces the new notebook chips.

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