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November 30, 2000

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From Our Correspondent: Making Enemies
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MARCH 17, 2000 VOL. 26 NO. 10

Notebook Revolution
Think of portable PCs as status symbols

Posters featuring pop stars and models surround Hong Kong salesman P.L. Chang. "Classy," "stylish" and "cool" are the buzz words. A fashionable clothing shop? Wrong. Chang is in the personal-computer business, including the fast-growing notebook-computer segment. "Before, people compared things like sports shoes," he says. "You had to have Michael Jordan's Nikes, you know? Now, with the Internet and because you are bringing your computer outside the home, a notebook is a fashion statement. Your friends can see what you have."

Cover: Stock Options
Still relatively rare in Asia, companies are likely to start giving employees equity as an incentive to work better and stick with the job. Thank the Internet
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Taiwan: The race for president is too close to call. Whoever wins, the island and its relations with Beijing will never be the same
• Interview: Chen Shui-bian does not want war with China
• Black Gold: Of gangsters, vote-buying and political corruption
• Geopolitics: The influence of Taiwan's brand of democracy
Thailand: What the Senate election means for political reform
Malaysia: Behind a debate on special privileges for Malays
East Timor: Why Falantil members are now rebels without a cause
Viewpoint: Vajpayee masks the fundamentalist threat

The Net: A geek summit in Taiwan
Computing: Hong Kong's hidden software industry
Cutting Edge: Simulating real life

Cash: With $1 billion, San Miguel goes shopping
Marketing: Notebooks as status symbols in Asia
Interview: Krung Thai Bank head says changes are coming
Investing: Mining resource stocks for profit

People: A*Mei drops pop for the classics
Entertainment: The hot spot for survival docu-dramas
Health: Protecting against Alzheimer's disease
Newsmakers: Zhu Rongji lays down the line
Looking Back: Mourning South Korea's President Park

The trend is most pronounced in Asia. "More than in the U.S. or Europe, a lot of our activities here are retail-oriented," says Darren Needham-Walker, IBM's Sydney-based director for mobile computing products. "The focus is on promoting computing as a natural extension of people's lives. Five years ago, our message was a productivity-based statement. Now it is connectivity - whenever, wherever." As wireless technology makes it possible for people to surf websites and use e-mail on the go, notebook makers are betting that their products will find wider acceptance. One way to enhance that acceptance - and to compete - is to market the portable as a lifestyle accessory. Says Hazel Clark, a researcher on design and their uses in Asian culture at Hong Kong Polytechnic University: "Notebooks can be status objects."

That is why you hear snappy spots on Singapore radio for Fujitsu portables. Or see pouty male and female mannequins flaunt their IBM Thinkpads on glossy posters. Chinese-music and movie idol Andy Lau Tak-wah endorses the Psion sub-notebook. Sexy Hong Kong starlet Athena Chu Yan lounges vampily on a Sharp Just-Fit PC-A280. "What a change from all that hype about ultra-fast CPUs and cryptic statistics that consumers are assaulted with every waking moment," writes editor Yeo Suan Futt in the technology newsletter CNET. Says Suzanne Miao of Asian advertising journal Media: "Computer companies are having to sex up the product. They have to talk to an audience who doesn't care whether it understands what the machines can and can't do."

Better get used to the hype. Some analysts see desktop computers fading away, at least in homes. (Selling to individuals in Asia including Japan is a $14.7-billion-a-year business, although the U.S. remains the world's biggest market for personal computers for the home, with $24 billion in annual sales.) Computer-industry consultant IDC predicts that portable Internet-enabled appliances will outsell personal computers by 2002. Last year, 11 million of these devices - including Net TVs, gaming consoles and e-mail terminals - were snapped up worldwide. By 2004, says IDC, that figure will rise seven-fold. What is a computer manufacturer to do? Fight back with ever handier notebooks, of course. Some of the most agile companies, such as Toshiba, have not bothered to produce desktops for Asia, choosing to focus instead on portables.

All the main computer-makers have launched slim - one-inch or thinner - creatively designed models aimed mainly at the individual Asian user. Research by industry leader Toshiba shows that most notebook buyers place a premium on form and appearance. Apple's colorful satchel computers are making a big splash in Asia, especially Japan. Acer is offering changeable notebook "jackets" in champagne and orange hues. Dell, long the purveyor of machines popular with governments and large corporations, has designed the Inspiron line for the home. The exteriors come in shades called "Tahoe Blue" and "Storm Grey." Says Judy Low of Dell in Singapore: "We introduced colors for the first time, reflecting our strategy to provide more personalized products."

Sony's super-slim VAIO notebooks use futuristic-looking magnesium alloy casings with a distinctive purple metallic tinge. "Our design is innovative - very cool, very attractive, very visual," says Murata Keiichi, who has been in charge of VAIO product planning since April 1999. The VAIO is very much top-of-the-line price-wise, but it is flying off the shelves, especially in Hong Kong and Singapore. "Japan is a great place to observe how people are using new technology," says an executive of a U.S. computer-maker who frequents Tokyo's Akihabara electronics district. IBM's first consumer-oriented notebook line, the Thinkpad i series, was developed in Japan.

The media industry is a beneficiary of the trend. According to consultants MindShare, ad spending on notebooks in Hong Kong went up 20% in 1999 from two years earlier. Of that amount, placements in consumer-oriented magazines (as opposed to business and other specialized publications) almost tripled. Computer companies are spending a bundle on TV campaigns too. For its Travelmate line, Acer emphasizes touchy-feely concepts - the human story of people with their notebooks on business trips. Says Normandy Madden, Asia editor of Advertising Age International: "Their ads are very consumer-friendly, which is something computer companies have not done much of before."

Just as portables are taking over desktops in the home, however, many wonder whether non-computing Internet-ready appliances may eventually replace notebooks as gadget-crazy Asia's new darlings. Some notebook makers agree - and are doing something about it. Even as computer portables shrink in size and weight (and price, although they still cost two to three times more than desktops), manufacturers are adding new features like DVD players and cameras. "The Internet world is about connecting people, which makes putting in a camera quite natural," says Sony's Murata. The idea is to allow portable users to take pictures and record events for uploading to the web. Enhanced security is another come-on. Acer is developing fingerprint-recognition technology for its notebooks.

An industry standard wireless networking technology, dubbed Bluetooth, is set for a mass rollout this year. Notebook computer folks, along with mobile-phone companies and Internet-ready appliance makers, are excited because Bluetooth allows ease of use and access across all those platforms. "Someday soon we might not even be carrying our computers," says Taiwan-based David Tsai of Acer's branded business unit. "We will be wearing them." He sees today's portables morphing into fashionable jewelry and clothing items. Tomorrow's Andy Laus and Athena Chus will not lack promotional gigs.

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