Low price notebook computer

SAN JOSE--Notebook computer buyers who have looked on enviously at the rock-bottom prices enjoyed by users of desktop PCs are about to get some welcome news. A convergence of factors is expected to soon bring about the long-awaited fall in mobile PC prices.

A new generation of low-priced microprocessors, combined with a sharp slide in the cost of displays and the ongoing memory chip decline, is transforming the market. This was brought home by Advanced Micro Device's introduction last week of a low-cost 300MHz K6 microprocessor targeting the mobile PC segment, following Intel's earlier 300MHz Pentium for mobile systems. The third of the three large X86-compatible MPU vendors, National Semiconductor, lags a bit behind with its 233MHz version MediaGX MPU, but National executives said they will come to market with a 266MHz version later this year, and will be at the 300MHz level by 1H99.

These factors are creating a new, lower-priced value segment, one that Intel has already begun referring to as the "basic notebook" market. It remains to be seen, however, what level of demand there will be for low-priced, fully-configured mobile PCs. In the case of the sub-$1,000 desktop PC, there was a vast consumer market that was waiting to be tapped. With the business market fairly well covered, the question arises, who will buy the value-oriented mobile PCs?

AMD's K6/300 microprocessor, priced at $229, is already available in a notebook from Compaq, the Presario 1250, priced at $2,399. Other OEMs are expected to announce notebook computers based on the chip in the near future.

S. Atiq Raza, AMD executive VP and CTO commented, "We plan to offer a full line of mobile processor solutions from entry-level to high-performance notebook computing."

The mobile AMD-K6/300 processor meets the demands of portable computing with an extended Tcase rating (85(C) and typical power consumption of less than 6.6 watts, AMD said. It is available in PGA and BGA packages, the latter offering a form factor with a footprint of one square-inch.

All AMD-K6 processors feature sixth-generation X86 processing, 64 kilobytes of on-chip L1 cache, industry-standard MMX instructions and manufactured in AMD's 0.25-micron process technology.

Specific Markets Seen

Over at Intel, Jeff McCrea, product marketing manager for Intel's mobile processors, said that a couple of specific markets are developing that will drive sales of the basic mobile PC.

"There are a couple of specific markets. One is consumers who can get all the benefit of mobility for an aggressive price. The entry point for the basic mobile PC market today is below 1,500. We are seeing Pentium systems for under $1,500; Toshiba has a box at $1,399. We are also seeing incredible demand for Pentium II-based notebooks, which are already down at the $2,000 level. Students are going to be a big category, as well as households that use them as a second PC."

When asked specifically when the market will move below the $1,300 price point that Intel has said will be the entry level for fully-configured notebook computers in 1999, Mr. McCrea said the answer to that question is still murky. "It is unclear when that will happen, but in 1999 you will see boxes around the $1,199 price point. We are seeing much lower prices in screen technology and, of course, memory. That has been a big boost.

"Intel has processors targeted at that segment and we are seeing the emergence of the mini-notebook such as the Sony 505. In terms of that category of extremely thin, light (notebooks) they have lower cost structure. That is one way costs will come down."

Mr. McCrea also noted that Intel has been offering processors for the mobile market for some time but, like everyone else, has now begun designing chips specifically for that segment. "Intel has had processors for mobile units for a long time. But they had been more of a fire sales market. Today developers see it as a big opportunity. New segments are coming into the marketplace versus traditional business users or road warriors."

Steve Tobak, National Semiconductor's VP of marketing and communications, said that the recent introductions by AMD and Intel of 300MHz MPUs for mobile PCs are not likely to quickly drive down the entry level cost of a mobile PC.

"No matter what Intel and AMD say, they are going to bring performance up at price points that have existed in the market for some time," Mr. Tobak said. "But, in the near term, those products aren't going to bring prices down. Downward prices of notebook have been historically driven by processors that were announced at least four quarters previously."

Putting in a plug for National's Cyrix MediaGX MPU, Mr. Tobak said, "The only exception is notebooks with the Cyrix MediaGX processor which are shipping at 233MHz at the lowest price of any brand name notebook, and we have a 266MHz processor coming later this year. I also expect that we will ship a 300MHz version of the MediaGX early in 1999."

Asked whether he thinks, as Intel does, that the entry level price point is currently at $1,500 and dropping, Mr. Tobak responded: "Exactly. But I wouldn't expect to see a 300MHz part at the entry level for some time to come, at least until the first half of 1999."

Notebook computers should hit the $1,300 price point shortly, he believes. "Notebook prices are definitely heading south. We see lower prices for memory, display and integration at the motherboard level.

"The cost of the display is the key factor as always. That's what's been limiting the price of displays. That's (display price reductions) happening now.

Notebooks do not present as big of a market for National currently, however, as they are for other vendors: "It's not as big a market for us as information appliances and the desktop PC," Mr. Tobak said. "Growth in information appliances will far outstrip the growth of notebooks in the near future making it the dominant category. IDC is saying that, by 2002 or 2003, non-PC information appliance shipments will equal that of PCs." Meanwhile, newer display technologies that Electronic News has learned will shortly be coming to market will cut display costs considerably, by a factor of 10, according to one display company executive. According to executives at Intel, AMD and other companies, the cost of displays has been the main stumbling block to lower mobile PC price tags.

Dan Schott, VP of R&D at display maker Three-Five Systems, noted that prices of thin film transistor (TFT) displays often used on mobile PCs are plummeting. "There is a blood bath going on in terms of overcapacity of TFT displays. New companies are springing up in Korea and Taiwan, giving competition to the Japanese. Price erosion has been enormous. They have been coming down rapidly, over 50 percent in the last year." "We thought that when 10.4-inch panels got to the $500 to $600 range that was something. Now 11.3-inch displays are down at the $400 range," Mr. Schott added.

Jim Bowser, VP of business development for Three-Five, said that company primarily sells into the small form factor system market such as personal digital assistants (PDAs), cellular phones and the automotive market, but it is considering moving into the notebook display market with a different technology.

"There is a chance we could enter the notebook display market but with liquid crystal on silicon. This technology uses a single crystal silicon and liquid crystal fluid. Its physical size is smaller. We have two products. The first is an SVGA (super video graphics array) 800x600 display that is 0.5-inch across the diagonal. We also have one that is an SXGA, 1280x1024 and is 0.8 inches. They are active matrix and you have to magnify them somehow."

The new displays are being designed in right now and are expected to bring significant cost savings to systems vendors, according to Mr. Bowser.

"We are sampling right now," Mr. Bowser said, referring to the company's LCoS series displays. ``Most of the products these will go in are in the process of being designed now. This is an enabling technology that will allow you to take portable displays like in your desktop from information content point of view. You will be able to view the same kind of data, able to display a sheet of E-mail with what we call microdisplays. u