NEWS ANALYSIS: Notebooks woo retailers

Notebooks will form a major part of Harvey Norman's growth strategy over the next two years, as consumer sales go through the roof.

Mass merchant sales have driven PC growth to a new high, with notebooks sales leading the charge. Inform figures show the notebook sector experienced its biggest level of growth ever in May. In fact, notebook sales accounted for a quarter of the PC market in May, according to Inform.

Retailers couldn't be happier. "Notebooks are bloody wonderful!" declared an ebullient John Slack-Smith, Harvey Norman's general manager, computers and communications. "I love the notebook category, it has been an absolute star."

Desktop sales were also strong among retailers. "I am not disappointed with PC sales at all," Slack-Smith said. "HP in particular has been rocketing along. There's good value for consumers in desktop PCs and our total desktop sales have been above expectation."

But as notebooks volumes continue to climb, the retailer will put more emphasis on the portable market. "We will be dedicating a lot more space to the notebook category in future stores," he said. "If you look at our internal ratios of desktops to notebooks, historically it is around 4:1. Now, in our good franchises we are seeing that ratio drop to 3:1, and I think by Christmas that will become 2:1."

Toshiba marketing manager Mark Whittard believes consumers are increasingly choosing notebooks as a desktop replacement option, as performance rises and prices drop.

"Also, there is an ongoing battle between desktops and notebooks. If we can convert 1 or 2 per cent of the desktop market, that is huge growth for us."

Slack-Smith said the increased sales reflected a changing workforce, rather than consumers looking for a desktop replacement.

"Those who are using notebooks as desktop replacements are still early adopters," he said. "Most consumers use notebooks for a combination of personal and business matters. It is a changing world. A lot more people are working from home these days and they need the mobility of a notebook."

But he does agree the combination of price and technology has proved a winner. "The gap between the relative technology position of the desktop and notebook at similar price points has been decreasing over the last couple of years. The value in notebooks at the moment is as good as it's ever been, and the aesthetics are just wonderful."

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