February 1, 2006 12:26 PM PST

Notebooks pass desktops in U.S. retail

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March 14, 2003
The numbers are in, and the U.S. is notebook country.

Sales of notebooks surpassed desktop sales in the U.S. retail segment for the first time, according to a report from Current Analysis. Notebooks accounted for 50.9 percent of personal computers bought at retail in 2005, while desktops accounted for 49.1 percent. In 2004, notebooks accounted for only 43 percent of U.S. retail sales, while desktops accounted for 57 percent.

The United States only accounts for roughly 9 percent of the worldwide market, and retail figures exclude sales from large resellers to corporations or direct sales from companies like Dell. Still, retail is an important segment, and overall notebook sales are rising, too. Richard Shim, an analyst at IDC, predicted that overall notebook sales in the U.S. will surpass desktop sales by late 2007. Until recently, the research firm thought that notebook sales would not pass those of desktops until 2008.

Low prices are one of the primary reasons for the surge in laptops. Several manufacturers offer fairly high-performance notebooks for about $1,000, while base-level notebooks can be scooped up for $499 to $699.

The proliferation of wireless networks since 2003, along with consumer adoption of wireless technologies, has also driven demand. Although most notebooks to date connect wirelessly through Wi-Fi, a number of companies are now selling notebooks with integrated cellular capabilities.

One of the big beneficiaries of the trend has been Intel. Since the 2003 launch of the Centrino mobile-chip bundle, notebooks have played an increasingly large role in Intel's profits. The company recently released a new version of Centrino based around dual-core chips. Rival Advanced Micro Devices experienced an uptick in notebook chip sales in the fourth quarter. Among PC makers, notebook-heavy Toshiba bounced back into the top five computer makers worldwide on the strength of portables.

"We?re seeing a fundamental shift in consumer buying behavior. We expect this trend to continue as 2006 will give the mass market dual-core processors and 64-bit capabilities," said Sam Bhavnani, an analyst at Current Analysis.

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where's the convergence?
Okay, since the writer chose not to, let me speculate a little on why this trend is happening. As one who went looking for a replacement desktop and almost ended up with a laptop, in spite of the fact that that wasn't really what I needed, here are some of the elements of one consumer's journey to the cash register:

1. Promise of convergence isn't being met, but laptops come closest--remember all the noise the industry people made last year about how 2005 would see the computer take its place in the living room as part of the home entertainment setup? Ain't happening, but laptops have more of the details (wireless networking, connectivity) to bring it about. The pc's I looked at this Winter have a lot of stupid configurations, like media center PC's with no tv tuner or expensive lcd monitors with no tuner or coax connections for using them as stand-alone televisions. THAT's what the consumer wants from convergence--maximizing the investment through greater utility.
2. size and style--what will it take to get pc makers to understand that those $500-$1500 desktops are serious investments by the consumers, and that style is going to come into play for any purchase that people have so much of themselves invested in? I'm convinced that Apple's merits as a computer have little to do with their sales--they are capturing the market for people who want beauty in their life. Most laptops, even the ugly ones, are more stylish or at least less brutal than the desktop.
Posted by Razzl (1318 comments )
Reply Link Flag
where's the convergence?
Okay, since the writer chose not to, let me speculate a little on why this trend is happening. As one who went looking for a replacement desktop and almost ended up with a laptop, in spite of the fact that that wasn't really what I needed, here are some of the elements of one consumer's journey to the cash register:

1. Promise of convergence isn't being met, but laptops come closest--remember all the noise the industry people made last year about how 2005 would see the computer take its place in the living room as part of the home entertainment setup? Ain't happening, but laptops have more of the details (wireless networking, connectivity) to bring it about. The pc's I looked at this Winter have a lot of stupid configurations, like media center PC's with no tv tuner or expensive lcd monitors with no tuner or coax connections for using them as stand-alone televisions. THAT's what the consumer wants from convergence--maximizing the investment through greater utility.
2. size and style--what will it take to get pc makers to understand that those $500-$1500 desktops are serious investments by the consumers, and that style is going to come into play for any purchase that people have so much of themselves invested in? I'm convinced that Apple's merits as a computer have little to do with their sales--they are capturing the market for people who want beauty in their life. Most laptops, even the ugly ones, are more stylish or at least less brutal than the desktop.
Posted by Razzl (1318 comments )
Reply Link Flag
 

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