CONSUMERS WIN NOTEBOOK PRICE WARS Prices are half what they were and may continue to decline


There may be no time like today to buy a notebook computer. But tomorrow may be even better.

With prices half what they were just two years ago, buying a notebook computer is like buying a house in a soft real estate market.

Today, a customer can walk out of a discount computer store with an entry-level notebook PC for only $1,500. And it's VTC anybody's guess when the notebook price wars will end.

It used to be that portable computers were primarily a second purchase for people who already had a computer on their desk. But technology that gives notebooks better screens, more storage capacity, longer battery life and improved communications makes them an alternative to a desktop model for tens of thousands of consumers.

This year, perhaps as many as 1.5 million people will buy a notebook computer, almost 20 percent of all personal computers purchased. By 1996, industry analyst Bill Lempesis estimates, half of all personal computers bought will be portable, including personal digital assistants like that announced recently by Apple Computer, and notebooks and future "sub-notebook" computers.

In only three years on the market, notebook-sized computers have all but completely taken over the market for laptop computers. Weighing three to seven pounds and measuring about 8 1/2 by 11 inches and 2 inches deep, notebooks pack as much power as a desktop system.

Weighing as much as 30 pounds, the earliest portable computers were dubbed "luggables" by people who had to carry them between home and office or across airports. The first of these machines, made by KAYPRO Corp. and the ill-fated Osborne Computer Corp., were based on CP-M, the first commercial personal computer operating system, and met a huge demand among early computer enthusiasts. But their success was cut short in 1983 when Compaq Computer Corp. came along with the first portable computer based on the DOS operating system.

IBM's attempts to capture portable customers have been disastrous, with the IBM Convertible and the IBM Portable. Its machines were always too heavy, too late or too expensive, Mr. Lempesis said. "The market always moved faster than IBM could move," he said. "And it still doesn't have a presence in the portable market." The same could have been said for Apple Computer -- until now. Four years after the 17-pound Macintosh Portable flopped, the Macintosh Powerbook is one of the fastest-selling notebooks on the market.

Only two years ago, notebook computers were priced considerably higher than equivalent desktop machines -- more than twice as high in many cases. But today the difference between the price of a middle-of-the-line desktop computer and a notebook-sized system is as low as 30 percent for some models -- and shrinking. And for about half the price of a desktop system, notebook users can buy a desktop "docking station" that lets them attach their notebook system to a full-size display and get the use of more add-in slots.

Notebook prices will fall even further, with Apple, IBM and a lot of small- and medium-size notebook manufacturers due for another round of price cuts, particularly after Compaq Computer's high-profile announcement of its Contura notebook, with a list price of only $1,699 for a low-end model.

The price war "is great for consumers because brand names are more affordable," Mr. Lempesis said.

Consumers get plenty of power and capability in these small packages.

Intel and other chip makers have designed microprocessors specifically for notebooks, such as the Intel 386SL, that use less power than traditional chips and therefore are less of a drain on the battery. Advances in screen technology have made notebook displays more readable on airplanes and in dim lighting. And the new PCMCIA standard that encourages the design and manufacturing of credit-card-sized hard disks, modems and other devices is making notebooks even more portable.

Meanwhile, notebook makers are squeezing in as many innovative features and performance enhancements they can find without raising the price. Look for extras such as built-in modems, pointing devices and software innovations to help manage the system's use of battery power.

The biggest bargains in notebook PCs can be found in medium-performance systems, such as those based on the 386SX microprocessor or the slightly more expensive 386SL chip.

Most recently, however, the battleground has expanded to include higher-performing 486-based systems. Notebooks based on the Cyrix 486SLC chip offer fast performance for a price lower than Intel 486-based systems, with prices starting at about $2,500 for a monochrome unit, though slightly more for a recognized brand.

For ultra-high performance, or for super low weight, expect to make a few trade-offs. Most recently, for example, Dell announced a 3.6-pound notebook based on the 386SL microprocessor with full-size display, but it took out the back-lighting feature in the display to keep the weight down. (But the $2,349 price tag is low, too.)

And notebook makers are hard at work on the next notebook innovations. Within the year, crisp, high-resolution color notebooks that use active-matrix screen technology, rather than the now standard but lower-quality passive-matrix technology, will become more affordable. And portable printers, powerful add-ons and better power management techniques will make notebooks an even better buy over the next few months.

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