Monday, April 9, 2007

Mobility needs drive sales, not the technology

The rising sales of notebook (out performing desktop figures for the first time) and growing at a rate of 25% this year, is expected to be sustained over time (Source: Consumer Electronics Association).

The important consideration here is not merely technology but what consumer need is being answered.

Notebook sales continue to grow and it extends to both the consumer and business segments.
Most of businesses will continue to use laptops primarily because of its mobility needs. Generally, only backroom operation personnel, interns, administration staff and designers require desktops.
Businesses tend to restrict notebooks purchases from selected vendors to ensure cost savings and IT support. In that respect, the selection of future laptops for businesses is much easier compared to consumers’.
Depending on the type of business and level of mobility required, you would typically base you purchase decision on criterions such as screen size, weight and the battery life. These criteria directly answer their mobility needs. Other factors such as CPU speed, HDD size, memory are still important but are merely supporting the technology needed for your needs. In some instances, you may decide to upgrade the memory and/or hard disk capacity. However, the decision to upgrade is generally fuelled by the requirements of the OS and software applications.
As long as business mobility needs continue to grow, laptops sales supersede desktop figures. Manufacturers will continue to add more technologies into their laptops to differentiate their products as businesses will look for more security, more connections, and greater mobility than ever before.

However, some new product concepts will continue to serve a niche markets as it doesn’t completely answer the audience's needs. For example, UMPC is a great technology to showcase, but do you really need it? It is too small to allow anyone to type long emails and too big to be carried in your pocket. Tablet laptops are great but the system often hangs and is definitely not as flexible as your traditional pen and paper. Finally, ultra light notebooks may be ideal for heavy business travelers but the high cost remains a major obstacle. Nevertheless, these niche segments provide a good opportunity to showcase good technology and eventually some may succeed.

In the consumer market, purchase criterias are slightly different.

It is still a real challenge for consumers’ to choose which laptop to purchase. Besides the number of brands, decision making is made harder by the fact that new models are being introduced and older ones discontinued almost every three to six months.

We can probably identify 3 key segments in the market :
1) Undecided consumer who may be a first time buyerThis person will go for price. They are usually not brand sensitive, and will be attracted by special offers. They may look for a end of life or secondhand product with limited mobility.

2) Decided consumer who may be a first time buyer laptopThese group tend to have specific needs. They may want a notebook for studying, for working at home, for their kids, for sharing pictures., games, multimedia, etc. They generally will seek recommendations from sales personnel or experts.They will go for the model that directly answer their needs

3) Decided consumer but not first time buyerThis group of consumers’ usually has an existing laptop or desktop. Through the years of usage, they tend to have some knowledge and experience on personal computers. Brand loyalty and sensitivity are common traits. This is a primary target audience for laptop manufacturers, they are loyal to the brand.

What is the trade off?
What are you willing to sacrifice when you choose a laptop over desktop to gain mobility? Everything comes at a cost. Manufacturers who can segment their offer and their product range will continue to win. However, they should not overlook the fact that the needs drive the sales, not the technology.

No comments: