Pentium Chip For Notebooks Drives Demand Quickly Changing Laptop Market Creates Headaches For Retailers

If you’ve been thinking about buying a laptop computer but have been holding off because of the expense, it’s time to go shopping again.

That’s the word from the mobile computing industry, where change occurs so rapidly that yesterday’s new models are today’s bargain-priced closeouts - and today’s hot machines are so much in demand that even with price tags of $5,000 and up, they can be hard to come by.

“At this particular time, demand is very strong - quite surprisingly so, in fact,” said Jeffrey Friederichs, vice president in charge of product marketing for Toshiba of America Information Systems.

“Usually you get a seasonal dip, but we’ll be shipping more in the first quarter of ‘96 than we did in the fourth quarter of ‘95.”

The Irvine, Calif.-based subsidiary of the $54 billion Japanese electronics giant led the notebook industry last year with sales of over three-quarters of a million units, more than second-ranked Compaq and third-ranked IBM combined, according to reports from the San Jose, Calif. research firm Dataquest.

Friederichs attributes the surge in demand to the long-awaited arrival of affordable Pentium notebooks.

“We’re just seeing our surge in the Pentium upgrade path,” he said. “That’s something that happened a year and a half ago in desktops.”

Toshiba has ramped up production in an effort to meet demand, but observers say shortages of certain models are a constant in the notebook business.

“The technology is changing very quickly, and as companies are able to incorporate advances into their product line that offer significant differentiation, buyers tend to flock to where the hot spots are,” said William F. Ablondi, vice president in charge of mobile computing and communications for Giga Information Group, a Westport, Conn., research firm.

“When that happens, companies may not be able to get adequate supply of the leading-edge component.”

For example, 1-1/2 years ago, 10-inch active-matrix screens - the brightest and fastest on the market - were in short supply. Today’s hot technology includes lithium-ion batteries, multimedia capability, larger screens and new Intel Pentium chips that are lighter and less power-hungry than their predecessors.

For retailers, keeping up with the laptop market can be a major headache.

“It’s expensive to keep those products on inventory,” said Mike McGuire, senior analyst for mobile computing at Dataquest.

“When the top of the line product is an $8,000 computer, you don’t see that at retail. That’s not a product that will be sold.”

Paul Rakov, spokesman for Circuit City, said laptop inventories are currently low for the Richmond, Va.-based electronics store chain and other retailers, partly because everybody is waiting for shipments of new notebooks with multimedia capability.

“Right now they’re not widely available,” Rakov said. “However, there should be plenty by early to midsummer.”

On the other hand, Rakov added, this is a good time for buyers on a budget to shop, especially if they don’t care about multimedia features.

“There are some good closeouts going on now,” said Rich Malloy, the editor in chief of Mobile Office magazine.