If FY 06 marked the tipping point for the notebook market, FY 07 saw notebooks make their mark as a serious challenger to the desktop. While the last fiscal notched 168% growth in volume terms, FY 07 saw the market rationalizing with 88.7% annual growth in unit shipments, according to IDC India.

That translates to Rs 5,996 crore in value terms, based on end-user selling price (street price). In terms of average selling value from the vendors perspective, DQ estimates the market to be Rs 4,886 crore, a growth of 62.8% over the last year. The drop in vendor ASV was a steep 13.7% while the end-user average price dropped by only 10%. That means the full benefit of falling vendor process are yet to be passed on to the consumer.

The awareness regarding notebooks also escalated over the year with wireless Internet access (via WiFi hotspots) becoming more prevalent. The convenience factor associated with notebooks spurred buyers to opt for it instead of a desktop. Industry experts believe that the notebook as a segment of the PC market is firming up. Hence looking at the current dynamics, growth will rationalize, and emphasis will be on delivering both high-end business as well as cutting edge entertainment features. Over the years the notebook market spanned low-, mid- and high-end segments, but with Dual Core processors and Vista now in place, configurations of notebooks have improved in general.

In technology terms, FY 07 saw the third major trend driving growth in the notebooks market. The year 2003 experienced the first inflection point with the advent of Intel Centrino processors. The second inflection point came in mid 2005, with AMD launching Turion 64, the industrys first 64 bit pure mobile processor. This time around, Intel sowed the seeds of a multi-core era with its Dual Core chips that redefined the power-performance paradigm.

Notebooks Make a Statement
But the bigger story is not about technology. It is about transformation of image of the notebook as a lifestyle product, as opposed to a business companion. This has made a substantive difference. With many of the leading vendors like HP, Lenovo, and Acer trying out celebrity endorsementsthat include Shah Rukh Khan, Saif Ali Khan, and Hrithik Roshannotebooks are a hot marketing battleground.

It is not surprising that power and performance are no longer the only criteria for notebooks today. "The market is slowly moving beyond the basic purchase decision criteria of processor speed, features, and price to brand image, looks and performance. The home segment is also warming up to notebook PCs as a replacement for desktops," says Deepti Isac, analyst, Computing Products Research, IDC India.

The Movers and Shakers
HP retained top spot with a 40% market share in FY 07 in unit shipment terms. Lenovo came in second with 17.6% share and Toshiba climbed up to take the third spot replacing Dell and Acer.

HPs continued success tells a lot about where the notebook market is headed. HP treated notebooks like a market by itself from early on. It had the most comprehensive product offeringplugging every segment, at every price point. It was also one of the first vendors to foresee consumerization of notebooks, when it roped in King Khan to endorse its products. HPs processor strategy is also very balanced. HP is one of the few vendors which have pushed AMDs Turion 64 processors quite aggressively. Over the year HP launched the Compaq nx6325 Turion dual core notebook that was extremely well received by the market.

If HP rode on the consumerization wave, Lenovo was a little taken aback. Lenovos loss of market share was primarily due to the fact that much of the new growth came from the home/consumer segment. Though Lenvos newer brands such as 3000 Y Series were meant for this segment, and Lenovo tried to beef up its consumer marketing by roping in Saif Ali Khan and Soha Ali Khan managing to increase mind share, this year will tell whether that mind share translates to market share or not.

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