Of course, there were some indications of the coming storm. For years, resellers had been able to buy pre-built and even custom-built notebooks from distribution missing only the brand sticker. Reselling tier-one brands such as HP and IBM had been going on forever, and even the densest, most pessimistic pundits acknowledged that, in theory, mobile PCs might someday follow the same white box path as their desktop counterparts.

ECS, ASUS, and a few other manufacturers released their first whitebook attempts in 2003. All told, the new SKUs made a fair number of headlines, but sales were disappointing. The Centrino branding campaign had propelled tier-one notebooks onto a stratospheric success path, but even though Intel tried to push the Pentium M/Centrino message through the channel and promote the whitebook concept as a viable alternative, problems abounded.

First off, whitebooks could not compete against tier-ones at prices below $1,000—and more realistically closer to $1,500—and this was the fastest growth segment in notebooks overall. Second, the service issue was a killer. Proprietary notebook designs meant that batteries, wiring, and even screws varied from brand to brand and model to model, making the stocking of service parts prohibitively expensive. Early whitebook distributors such as D&H tried to absorb this complexity but often to their own detriment. Thirdly and perhaps most importantly, the majority of resellers bore the ingrained preconception that you can't succeed with notebooks. You can't open them up, you can't be price competitive, and—that old mantra again—you can't beat Dell at Dell's game.

Bland As Can Be. FIC’s MB02 was a sturdy little unit and one of the first channel-friendly Centrino designs. However, the notebook’s generic look and feel won it few raving fans.

Two years later, the anecdotal evidence was overwhelming. According to whitebook manufacturers, some of the biggest notebook resellers in the country were showing double-digit monthly numbers—that's unit sales, not percentage growth. Meanwhile, the overall notebook business was booming, leading IDC to posit in December that notebooks would comprise over 50% of the client PC market by 2008. Global notebook shipments are expected to grow nearly 18% this year. However, nearly all of this growth comes from tier-one brand sales, not whitebooks. Why aren't white box system builders moving whitebooks? Perhaps the sentiment is best summed up by Gartner research vice president Leslie Fiering.

"Two things push white boxes," she says. "You can get to market cheaper because you don't have a lot of marketing overhead. In a small factory, you might have low labor rates. Or the box comes from a service provider who might make a little revenue on the side while remaining the sole source. But the notebook buyer is going to be a little different, because, in developed countries, the middle class has the money to buy the brands. They'll go from white box to brands because they can afford it. But there's also a correlation between notebook adoption and the middle class because they have the disposable income to afford a notebook, and by the time they can afford a notebook they can afford a brand. So mom and pop shops would rather sell a brand, get the warranty, and get the brand support. They won't make as much, but they'll make something on the sale compared to trying to build it themselves, where they'd lose their shirts. And they won't lose the business."

The Right Kind of OEM Sale. This Sharp Actius AL3DU was a 2005 model with integrated 3D display, making it hot product for vertical market resellers with customers doing 3D modeling and simulations.

Fiering also argues that it's not the labor or configuration of whitebooks that's the problem; it's the economics. There's more testing with notebooks, she argues. Warranty and support are more difficult. And most of all, whitebooks suffer on economies of scale. Tier-one notebooks can be assembled with cheap Asian labor and shipped abroad in palettes while whitebooks are usually assembled near the destination with higher costs on small production lines. This is why 90% to 95% of all notebooks are made in Asia.

So yes. In the first Whitebook War, the channel lost. Sure, there were pockets of success. Some resellers were able to generate sales under their own private brands, but few would protest that whitebooks have been a runaway hit. Most often, sales remain a trickle of half-hearted guerilla effort, not a concerted assault.

"Every month when we review our sales data," says ASUS vice president of marketing Raymond Chen, "we see resellers selling one or two whitebooks a month. Tons of them, hundreds, every month. If we just get these resellers to move five units a month, look at the growth. The first roadblock is already over. We know resellers can sell whitebooks."

Do resellers themselves believe they can do it? By and large, no. Not yet. But if Intel has anything to say about it, they soon will. Get ready for Whitebook War II.

Greater Than the Parts

As you doubtless know by now, Centrino is Intel's mobile platform based on Intel brand mobile CPUs, chipsets, and wireless NIC modules. The initial Centrino platform, Montara (Banias was the code-name for the Pentium M of the time, not the platform), arrived in March of 2003 accompanied by the epic media blitz and hot spot rollout that made wireless networking a fixture of mainstream computing. Sonoma followed in January 2005 with incremental performance improvements at several points, but enhancements such as support for DDR2, SATA, and HD Audio were largely underutilized. This past January, Intel unveiled the third-generation Centrino platform, Napa, based on the new Core processor (Yonah), Mobile 945 chipset, and 3945ABG tri-mode wireless module.

Things change. The transformation of Intel's corporate logo has drawn its own share of attention, but Centrino's image has changed, as well. Make sure your marketing reflects the new look.

Yonah, which is in many ways a 667 MHz front-side bus update to the Sonoma Pentium M, comes in single-core Core Solo and dual-core Core Duo versions. Core Duo marks the introduction of dual-core processing in mobile PCs, an event that shouldn't be underestimated in its importance as a solution facilitator.

"Dual-core is tremendously beneficial," says ASUS' Raymond Chen. "If you're pulling up a huge file in Photoshop, grabbing all this data off the hard drive, and you try to pull up a Web page, the Web page won't come up. But now with dual-core, it comes up right away. Users need that kind of value on any PC whether it's desktop or mobile. Core Duo just brings those two platforms even closer on performance."

Tier-one OEMs started showing Core Duo designs in February, but the chip won't ramp up in the channel until late March and April.

Despite the sluggishness of the whitebook sector, ASUS emerged early on as the leading channel brand in mobile PCs, and over its numerous model revisions, the company modified its designs to better facilitate system building. Whereas early whitebooks designs such as the MB02 required builders and upgraders to dismantle much of the unit because most upgradeable components were located under the keyboard and protective panels, newer models make items such as the hard drive, miniPCI card, and memory easily accessible via panels on the notebook's bottom. What used to take 15 minutes to reach with a lot of screwdriver work now takes about 30 seconds. For more complex maneuvers, such as reaching the CPU socket by removing the primary heatsink unit, ASUS includes a video CD showing resellers the simple steps involved in building and servicing its portables.

The New Centrino. With dual-core CPU compatibility, beefed up integrated graphics engine, 667 MHz FSB, HD Audio, Gigabit Ethernet, and more, the 945GM puts Centrino on nearly equal footing with desktops.

Easy parts access is one thing, but what the whitebook market really needed was a standardized set of parts. When things like optical drive and keyboard mountings are proprietary to each vendor and even notebook model, channel service becomes a nightmare. Someone in the supply chain has to maintain a slew of replacement parts; the higher up in the chain this person is the more cost efficient the maintenance becomes, but service turn-around time rises correspondingly. For many resellers, this was the deal breaker for whitebooks—and Intel knew it.

CBB Strikes

Enter the secret weapon in the new whitebook war: Intel's Common Building Blocks (CBB) program. At launch, the CBB promotes adoption of industry-accepted mechanical and electrical specs for seven components: hard drive, optical drive, LCD panel, battery, "top A" notebook panel, AC/DC adapter, and keyboard. Of these, four—hard drives, optical drives, LCDs, and power supplies—have been the chief priority of manufacturers. Reasoning for the first three is easy enough: These are the most common failure points in a notebook, so making these swap-friendly helps resolve whitebooks' traditional servicing issues. As for power supplies, anyone who has ever tried to buy an external battery or replace a lost AC adapter knows what a nightmare the "tips" situation has been. At last, those days of scattered adapter kits and proprietary parts are nearly over, much to the channel's advantage.

Old vs. New Assembly. With early whitebooks like the FIC MB02 (top) and ASUS L5800A (middle), builders had to meticulously dig in through the keyboard panel. (Close examination shows how we accidentally broke a connector wire on the ASUS unit.) In contrast, Intel's Interchangeability Initiative makes working on units such as the ASUS Z62F (bottom) much quicker and safer. All primary upgrade components are accessible via bottom panels.

"These [CBB components] all meet the industry standard specifications set by the Intel Interchangeability Initiative," notes Intel's North American channel marketing manager for mobile products, Wes Sieker. "Now, is a customer going to be able to source an LCD screen easily from multiple vendors right out of the chute? No. The vision is to make that happen. That's going to take a lot of work and continued ecosystem enablement. That said, things like the battery pack, keyboard, customizable panel, and AC adapter, those kinds of things are ready to become a reality today."

LCD panels will be longer getting to the channel primarily because the CBB initiative only applies today to notebooks based on the just-released Napa platform. Thus it is unlikely that many CBB LCD spares will be needed before the third quarter of this year, which is about when you can expect to start seeing them appear on price lists.

Parts interchangeability is a huge deal when it comes to targeting commercial and government entities, two groups where rapid and low-cost servicing are critical. Sieker notes that Intel is already seeing resellers pitch interchangeability to school districts, for example. Bid judges are starting to give more weight to interchangeability, and some CBB components, such as the battery, are already starting to become bid requirements. The advantages for buyers are obvious: easy access to backup batteries at purchase as well as the ability to source replacements from anywhere on the road. Moreover, this gives an immediate advantage to resellers over tier-one competitors because the big OEMs have yet to embrace interchangeability, perhaps in part because of the margin hit entailed in forsaking proprietary parts.

LCDs Made Easy! Need to swap an LCD panel? A tier-one screen might cost up to $600. A Common Building Blocks screen may well be half that price.

"I'd guess the tier-ones will adopt [CBB] in a year to two years," says Intel's Matt Harrison, Build to Order notebooks distribution manager, North American channels. "Right now, though, it's a big differentiator for us and will be for a while. Batteries in particular are just so compelling. I don't have a solid, broad comparison sheet nailed down yet, but just generally speaking, we're seeing Acer aftermarket batteries in the $90 to $120 range, keyboards from $50 to $120, and LCD screens at $450 to $600 because they're locked into that manufacturer. We think we can deliver aftermarket pricing on these Common Building Blocks at about 50% of those prices."

We should also point out that CBB components are not specific to each notebook generation. A Napa platform LCD display should swap easily with an LCD screen from whatever Intel mobile platform is extant two years from now. Naturally, this is a smart way for Intel to lock customers into its platforms from here forward, although there's nothing keeping competing chip manufacturers from adopting CBB standards. More importantly, this is a strong appeal point to buyers who have become accustomed to stretching their desktop investments through periodic upgrading rather than outright replacement. Notebooks aren't quite as upgradeable as desktops, but CBB gets us a lot closer.

The "top A" panel, more commonly called a customizable notebook panel (CNP), is worth special notice. In the outer lid of each compliant notebook, there is a raised rim that runs all the way around the PC's surface. The rib gives the screen edge greater strength, but it also creates a slight depression over most of the lid in which the reseller can apply an vinyl or polycarbonate adhesive panel bearing anything from private brand logo to a faux brushed aluminum plate. The CNP feels much like a hard surface mouse pad and presumably resists long-term wear and peeling.

Need More Power! Proprietary notebook batteries and AC adapters will soon be a thing of the past-at least for channel resellers who adopt CBB-compliant laptops.

CNPs might appeal to customers such as real estate offices, which would want to outfit their field agents with strongly branded yet unobtrusive equipment. Consumers are likely to enjoy the options for personalization. Currently, there are two vendors, Worldmark and Brady, outfitted for creating CNPs. In quantities of 50+, Intel expects that pricing per panel will land in the $4 to $5 range. FedEx Kinko's is also being set up to enable one-off CNP print jobs via its Web site. Users or resellers can simply upload artwork per Kinko's specs and pick up their panel for around $18 to $20. If your buyer has a custom license plate in your parking lot, a CNP upsell should be no problem.

As ambitious and promising as the CBB is, there are some limits in the mobile form factor that won't be going away any time soon, chief among these being proprietary motherboards. "Think about the fundamental structure of a notebook," says ASUS' Raymond Chen. "All of the connections have to go along the edge of the board. So for different notebooks, the size and design will be different. And the other thing is thermals, where you place the CPU, where you place the hard drive. Again, that depends on the different sizes and thicknesses of the notebook. Those are the key deciding factors in component location. Then from that you go do your motherboard design and layout. But that's what makes having standard notebook motherboard form factors so hard. If we could make an open standard motherboard for portables, that would be a tremendous driver to make this notebook business just like white boxes from years ago. Unfortunately, that's not an easy thing to do."

One of the biggest problems distribution faced with whitebooks was managing all of the different spare parts programs from multiple vendors and offering resellers a consistent solution. "It's caused a lot of angst and issues for resellers, distributors—basically the entire channel," says D&H marketing vice president Dan Schwab. "But universal components across vendor platforms is one of the key puzzle pieces that has been missing and that Intel is trying to fix for 2006."

Sticky Spills? No Worries. CBB keyboards feel flimsy in your hands, but they're sturdy and comfortable to use in practice. The whole installation process takes less than 30 seconds.

All that said, not every reseller is viewing the CBB program with rapt enthusiasm. C9 Tech is a four-person shop in Kansas City that caters to enthusiast consumers. Company president Sasha Trupcevic notes that because his store only sells ASUS whitebooks, the CBB is not important to him. ASUS has always been superlative with providing parts and turning around RMAs quickly. Thus the roughly 30 whitebooks C9 moves each month have yet to necessitate maintaining a large spare base locally.

Most whitebook resellers seem excited about CBB, though. TCW Computer Systems of Pennsylvania sells Compal and Quanta whitebooks. The company, which specializes in PCs, networking, and managed services, sold about 300 units last year and hopes for 500 in 2006. Owner Lamar Weaver expects some of that growth to result from the benefits of interchangeability. "If anyone had reservations about doing whitebooks before, that should take them all away," says Weaver. "For us, that's the last difficult part about servicing notebooks. Now we have standardized parts that we can keep in stock. If a keyboard dies, we can change it out in a few minutes and the customer's on his way. It's a great program. I'm really excited about it."

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