Dual-core models ready to take over

Dual-core models ready to take over

Posted : July 03, 2006

	The GT Series from FIC Taiwan feature Intel Core Duo processors, 15.4in widescreen display and SATA hard disk module.

The transition to mainstream of dual-core notebook computers steps up a gear. Fifty percent of 2006 shipments expected to be dual cores

Notebook computers with dual-core solution are forecast to surpass 50 percent of total shipment from notebook computer makers in H2 2006, by which time AMD would have already made available its mobile 64-bit dual-core version, according to interviewed companies and Taiwan's Market Intelligence Center (MIC).

Taiwan makers have released notebook computers based on Intel's Core Duo technology in Q1 2006, right after the multicore processors were launched. Almost all mainland China notebook computer makers have also already released models running Intel Core Duo processors, including Centrino Duo systems.

Based on 65nm process technology, Core Duo and Core Solo processors are smaller, less power-hungry and higher performing than previous-generation Dothan solutions that are manufactured based on 90nm process technology. Some makers claim that Intel targets to raise the share of dual-core notebooks to 90 percent of the total by Q4 2006 and to 95 percent by Q1 2007.

As of Q2 2006, about 10 percent of notebook computer shipments from mainland China were Centrino Duo systems. Dual-core systems are expected to take up 20 percent to 50 percent of total output in 2006. By 2007, Centrino Duo systems are projected to replace Centrino systems as the mainstream notebook computers.

Feature-wise, the latest notebook computers are evolving not merely as desktop PC replacements but as multimedia entertainment centers as well. Many models are integrated with built-in digital TV tuners, high-end graphics chips and PCI Express bus for 3D gaming. Dual DVD recordable drives are becoming standard add-ons.

Widescreen models are becoming the dominant screen type. At least 60 percent of notebook computers to be shipped in 2006 will have widescreens, says the MIC. A wider variety of external designs have been released, with the female market as the main target. For instance, Asustek Computer Inc.’s S6F sports pink crocodile leather housing. A number of suppliers including Acer Inc. have also released lightweight, all-white models.

The second half of 2006 is expected to bring on more wireless connectivity options. For instance, 3G SIM modules are forecast to become popular especially in business models to be shipped to Europe. By 2007, some models will be embedded with 802.11n MIMO modules. WIMAX connectivity is also available, but mostly through add-on cards and dongles.

Similar to their Taiwan counterparts, mainland China makers are optimizing their notebook computers for multimedia entertainment and wireless connectivity. The days of plain vanilla models are over, with new notebook computers featuring stylish, lightweight designs. Among the common high-end features are widescreen LCD monitor, large-capacity hard disk drive and RAM, discrete graphics engine, built-in wireless connectivity via Wi-Fi and Bluetooth, TV tuner and DVD recordable drive.

Even though AMD platforms cost comparatively lower than Intel's, few mainland China makers are developing new models around the former. Less than 10 percent of notebook computer output by homegrown makers contains AMD processors.

Taiwan makers are more likely to use AMD processors. The chip maker's recent release of Turion 64X2 processors may attract more suppliers to adopt their processors and boost AMD's overall share in the notebook computer market from less than 10 percent to 15 percent by the end of 2006.

	The S6F from Taiwan's Asustek features Intel Centrino Duo technology and a fashionable leather casing.

Core Duo systems to account for up to 60 percent of shipment from Taiwan makers

The MIC estimates shipments of notebook computers to reach 72.52 million units in 2006, a 22-percent increase over 2005. The Institute of Technology Research Institute (ITRI) forecasts a slightly lower shipment volume of 71.2 million units and a growth rate of 17.8 percent.

As notebook computers approach more competitive prices, consume less power yet offer better performance, more desktop PC users are expected to choose notebook computers over desktop PCs in the next replacement cycle, says Albert Chen, an MIC analyst.

Clevo Computer Co. plans to release 12 to 15 new notebook computer models in 2006, of which 60 percent will be based on Core Duo platform and 30 percent will run AMD Yamato processors. The company's factory in Kunshan, Jiangsu province in mainland China has a monthly production capacity of 70,000 units, with average monthly output reaching 40,000 units.

Clevo's main export markets are Europe, India and Central and South America.

First International Computer Inc. (FIC) forecasts Core Duo systems to account for 30 percent to 50 percent of its shipment in H2 2006. Yamato notebook computers will comprise less than 20 percent of shipment.

FIC's factory in Suzhou, Jiangsu can produce 300,000 units per month. In 2005, FIC shipped 1.2 million notebook computers to Japan, Europe and mainland China. It offers both dual-core and 64-bit notebook computers based on Intel and AMD platforms, respectively.

Asustek maintains three factories in Taipei, Taiwan and Suzhou and Shanghai in Eastern China. The total production capacity of its three factories reaches 700,000 units per month.

Asustek forecasts Core Duo solutions to account for 50 percent of its notebook computer shipment in H2 2006.

	Shenzhen-based Xinlan has released SALO W02-5510W, which features a Pentium M740 CPU, Intel 915GM chipset and 12.1in WXGA TFT-LCD monitor.

Notebook computer exports grow 31.6 percent in early 2006

Mainland China is the largest manufacturing base for notebook computers, accounting for about 75 percent of global shipment. The China Computer Industry Association (CCIA) estimates that makers in the mainland, both homegrown and foreign-invested, have a combined production capacity of 45 million notebook computers monthly.

Data from China Customs indicates that in 2005, mainland China makers exported 41.3 million notebook computers, a 63.3-percent increase over 2004.

Shipments in the first two months of 2006 hit 6.5 million units, an increase of 31.6 percent year-on-year. The bulk of exports went to OEM giants such as Dell, HP, Panasonic, Sony and Samsung.

There are about 25 makers of notebook computers in mainland China, about half of which are Taiwan-invested firms located in the Yangtze River Delta in Jiangsu province. Homegrown makers are mainly based in Shenzhen, Guangdong province.

Hasee Computer Co. Ltd and Topstar Digital Technologies Co. Ltd have released four models each. Both are planning to release at least two more models before the end of the year. Shenzhen Xinlan Technology Co. Ltd has already introduced six models. Centrino Duo notebook computers account for 5 percent, 10 percent and 20 percent of shipment from Hasee, Topstar and Xinlan, respectively.

Even though most mainland China makers are domestic market-oriented, many have begun to explore overseas markets, especially Europe and North America, where mostly high-end models are exported.

Hasee has a factory in Longgang, located 10km from downtown Shenzhen. It has a production capacity of 80,000 units. The company expects to ship 800,000 notebook computers in 2006, of which 50 percent are Centrino Duo systems. Hasee produced 500,000 notebook computers in 2005.

Hasee started exporting notebook computers in 2006. Its main export market is South Korea, where it ships to OEM customer, Anynote. The company plans to establish sales offices overseas, including Europe, North and South America, Southeast Asia and the Middle East. It is also expanding its factory space by 200,000sqm over the next five years in order to support its overseas expansion.

The L240R from Hasee features a T2400 1.83GHz Core Duo processor with 2MB L2 cache and Intel 945PM+ICH7-M chipset. It is equipped with a 15.4in WXGA TFT-LCD monitor, 1GB DDR2 RAM, 80GB SATA hard disk, DVD-RW drive, ATI Mobility Radeon X1600 graphics chip and 802.11a/b/g wireless connectivity.

Established in 2003, Topstar's factory in Longhua, Shenzhen has a monthly capacity of 30,000 units. In 2006, Topstar expects its output of notebook computers to reach 300,000 units, a threefold increase over its 100,000-unit production in 2005.

Topstar plans to double its production capacity in 2006 as it enters new markets in Europe, the Middle East, Southeast Asia, North America and Africa. Its OEM customers in the mainland include Founder, Haier and Tsinghua Tongfang.

Xinlan, which was founded in 1997, has a factory located in Baoan district of Shenzhen. Its monthly production capacity is 25,000 units. The company has begun to export notebook computers to Vietnam in February 2006.

Xinlan's SALO W02-5510W has a pearly white enclosure and weighs 1.8kg. It comes with a 12.1in WXGA TFT-LCD monitor.

	The Asus A7 from Taiwan's Asustek features a 17in display, discrete graphics and hybrid TV tuners.

Average prices to fall 13.2 percent in 2006

Shipment of notebook computers is growing, even as average selling prices continue to slump. The ITRI predicts a 13.2 percent decrease in average selling prices in 2006 from the average of $601 in Q4 2005 due to strong pressure from buyers on makers to lower prices. Makers have received a boost from LCD panel suppliers who allocated capacities from LCD monitors to notebook-use panels, says the ITRI, resulting in lower panel costs. Panel costs have already dropped by as much as 20 percent in 2005.

Most Taiwan makers ship their notebook computers as barebones to OEM customers. Barebone systems without CPU, memory module, hard disk, LCD panel and optical drive are priced $200 to $280.

The main catalyst that could push dual-core solutions to the mainstream may come from Intel, which has already slashed prices of its dual-core processors for desktops by as much as 40 percent in Q2 2006. A similar slash in the company's mobile solutions is expected to follow soon.

Another round of major price decrease may happen once AMD 64-bit dual-core mobile CPUs become widely available before the end of 2006, and the new Intel Santa Rosa platform is launched in Q1 2007.

Centrino Duo notebook computers from mainland China makers are priced $874 to $1,374, or about $30 to $50 higher than Pentium M-based models.

Hasee's L230E, which features a Yonah Core Duo T2300, Intel 945PM+ICH7-M, 15.4in WXGA TFT LCD, 512MB DDR2 RAM, 80G SATA hard disk, combo drive, ATI Mobility Radeon X1600 graphics and 802.11a/b/g wireless connectivity, is priced at $1,086. The company expects its entry-level Centrino Duo models to fall to $625 by the end of 2006.

Topstar quotes $350 to $450 for barebone Centrino Duo systems. This could further decrease by $50 to $100 in Q3 2006.

Note: All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.