Notebook computer prices, which have declined steadily over the past two years, will plateau and may increase in the near future due to a shortage of LCD screens.
Several major notebook vendors said that it remains to be seen how dramatic the effect will be, but all agreed that the shortage will have an impact on notebook pricing.
"I won't say [prices] will definitely go up, but they will not be going down," said Eric Brennan, manager of product marketing in the mobile division at Compaq, in Houston.
LCD-makers appear to be the cause.
Due to increased demand for large flat-panel displays for desktops, and residual effects of the Asian financial crisis, LCD-makers are pushing larger screens with higher profit margins to notebook vendors. But notebook-makers are not sure they can sell 14- and 15-inch screens that add weight, size, and cost to products in a market that wants lighter, thinner, and cheaper solutions.
"I think 13.3-inch screens are too big anyway," said one IT manager of a Fortune 500 company. "Going beyond that size is a problem. I don't think [a]14-inch [screen] would add much value."
PC vendors are feeling trapped.
"We are kind of being forced to sell products by what [LCD makers] are willing and wanting to make," Brennan said.
As a result, notebook-industry watchers say price hikes are on the way.
"TFT [thin-film transistor]panels will definitely cost more," said Gerry Purdy, president of Mobile Insights, in Mountain View, Calif. "High-end notebooks will see about a 5 percent increase in price and midrange systems should stay stable."