Market Report – Laptop Computers

Luke Harrison, Jacob Bottomley & Jack Brook5th December 2014

Executive Summary

Looking at laptop computers, there seems to be 4 key markets. There are basic

notebooks used for everyday web browsing and social media. There are gaming

laptops, which are designed to specifically enhance the gaming experience. Also,

‘standard’ laptop computers which would more often be used in business for web

browsing, research, communication, word processing, office based processing

(Excel) as well as entertainment. In addition to these, there are also a more

exclusive laptop which are produced by Apple. They are the MacBook Pro and the

MacBook Air, which seem to be trade specific (design, music etc.…) with these you

get what you pay for, a high performance and quality for a high price.

We are looking at the more ‘standard’ kind of laptop which we think suit people

between the ages of 16-30, both male and female, who are studying at college or

university or have moved out of University into quite an academic business-like

field. The laptops we are looking at are seen as a general all rounder as mentioned

earlier. Despite this, the laptop computers we are focussing on are:

ASUS X550CA 15.6”

Intel Core i5-3337U Processor

Windows 8

4GB RAM

1TB Hard Drive

£399.99

HP Pavilion 15-P0785A 15.6”

Intel Core i3 403OU

Windows 8.1

1TB Hard Drive

8GB RAM

£399.99

Acer E5571 15.6”

Intel Core i3 4005U

Windows 8.1

8GB RAM

1TB Hard Drive

£379.99

Toshiba Satellite Pro 15.6”

Intel Core i3 405U

Windows 8.1

8GB RAM

1TB Hard Drive

£389.99

(Pcworld.co.uk, 2014)

As you can see, each laptop is of very similar specification and price therefore each

are rival products. None of the companies who supply the laptops are based in the

UK or even Europe.

Acer – Taipei, Taiwan (Acer-group.com, 2014)

Asus – Taipei, Taiwan (History, 2014)

HP – California, USA (www8.hp.com, 2014)

Toshiba – Tokyo, Japan (Toshiba.co.jp, 2014)

The turnover history from 2009-2013 is as follows in billions (USD$)

NET 2009 2010 2011 2012 2013

ASUS

(Marketwatch.com,

2014)

12.48 16.49 16.58 22.46 21.45

HP

(Marketwatch.com,

2014)

8.76 7.07 12.65 5.11 5.01

Acer

(Hoovers.com,

2014)

0.352 0.514 -0.216 -0.099 -0.683

Toshiba

(Ycharts.com,

2014)

13.264 0.971 6.313 4.107 3.540

For the PEST analysis we found:

P- Environmental issues e.g. products have such a short life cycle and new

technology is developed all the time, leaving products obsolete. Producing new

products all the time can be harmful to the environment through the use of none

renewable energy like oil.

Laptops do not pose a real environmental threat as most of the components can be

recycled and there is legislation in place such as RoHS (Restriction of Hazardous

Substances) in the production of the laptops that keep hazardous products to an

absolute minimum.

E- Laptops are very economically viable because they are highly sought after and

are a necessary part of the modern world. They are unlikely to become obsolete in

the near future due to their nature. Especially the ‘all rounder’ laptops we are

looking at. They will always be needed for something.

S- The style of laptops is important. People are always looking for the latest trends.

They want them to be as thin and light as possible but still perform to a high level

with a crisp display. It is important to take into account social trends and shifts in

styles.

T- Laptops must always compete and keep up with the latest trends in technology.

Money must be spent on the research of contemporary technology and laptops

must always break barriers in their technological development. Since the number

of laptops produced and sold is so great, technology is always moving. It is

important to keep up with ever changing technology to maximise profits.

Below displays the position of the product we are researching on the market.

Product Placement:

We believe that the standard laptops that we are studying, that can perform as an

all rounder, will be of a slightly high price and provide an above average quality. In

relation to a notebook it would be of far better quality and a higher price, but in

relation to a gaming laptop, which is specifically built for a certain hobby’ it would

be of both lower quality and expense, where as a MacBook would be of far more

expense and far more quality, technically and aesthetically.

Below is where we believe the Asus, Acer, Toshiba and HP laptop fall in relation to

each other.

Based on the specification of each product and the price they are we believe that

the above product placement is appropriate. Both the HP and the Asus laptop are

the same price, however the Asus has a better processer, an i5 processor as

opposed to the HP’s i3. The amount of RAM slightly differs but they both have a

1TB hard drive.

We found that the Toshiba and the Acer are lower down on both price and quality.

They are £379.99 and £389.99 respectively and both have an i3 processor and 8GB

RAM as well as a 1TB Hard Drive.

SWOT Analysis:

Strengths: Cheap and easy to manufacture with a relatively short life span,

therefore people will buy a new laptop quite often, maybe every 3-4 years. Also the

convenience of laptops is another huge strength, people will buy them as they are

easily portable and simple to just slide in a bag to take anywhere, therefore you

aren’t always relying on external memory e.g. memory sticks, discs, hard drives

when on the go.

Weakness: Some people will see the short life span as an issue and may chose to

spend more money on a higher performing and longer lasting computer. They may

opt for a desktop or a more prestigious type of laptop like a MacBook. Despite the

products we are looking at being very strong all rounder’s, the price for something

that may not last more than 4 years can be a put off. Also, laptop computers are

susceptible to various viruses and technological issues. The cost of repair can

always be a put off therefore long warranties on purchase may be something that

you would have to look into providing when manufacturing and selling laptops.

Opportunities: Everyone has a fear of their laptop becoming riddled with viruses

and losing all their work, so it would be possible to sell the laptop as a package

with a certain brand of anti-virus software e.g. Norton, McAfee, Kaspersky. In

addition to this, people always want accessories for new gadgets that they

purchase. There would be opportunity for laptop bags, cases and skins. Should the

manufacturer of the laptop brand them, they could sell for more than an everyday

run of the mill accessory because they are putting their trust in a stellar product by

a reputable company.

Threats: The rise of tablets, now being advertised with Microsoft Office may be a

threat in the near future, given that despite the convenience and portability of the

laptops we have studied, tablets are clearly even more convenient and portable.

People will put their trust in the more reputable brands like Lenovo, Amazon

Kindle and Samsung.

BMG Analysis

For the BMG analysis, we found as displayed below:

We believe that as a new product, the ‘all round’ laptops we have studied will be an

instant hit. A reasonable price of between £350 and £400 will help them become

‘stars’. People will put their trust in a reputable brand for a familiar product and it

will fast become a big seller as laptops are always in demand.

However, we also think that the laptops we have looked at will have time to

become a ‘cash cow’. This is because of the ever changing and rapid movement of

technology means new laptops will be manufactured and released ever 6-12

months. Therefore, a certain kind of laptop will never have time to become a cash

cow as there will always need to be a lot of money spent on marketing to push new

products and technology.

After approximately 12 months, following the release of new laptops with updated

technology we think the laptop will go to the ‘dogs’ and inevitably fall off the

market. We accept this based upon the ever-changing world of technology and the

small life span of a laptop computer.

Summary

Taking into account the above information, it is clear to see the popularity of the

‘all round’ laptops we are looking at. It is clear to see that they will sell well based

on the figures of the last 5 years. It was only Acer who failed to make a profit in

2011, 2012 and 2013. They did, in fact, lose money. Asus, HP and Toshiba all

managed to make astonishing profits each year.

Also with the inexpensive manufacturing costs and short life span, coupled with

the large demand they are a great product with limited political, economical, social

and technological issues.

Furthermore, it seems that in the product placement analysis there is direct

correlation between the price paid and the quality received therefore providing

excellent value for money, something that can be a key selling point.

Bibliography

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