Whitebooks Gain Ground Over Brands

The result is a milestone for the system builder channel and comes a year after the first large-scale component and building block products began to ship through distributors to smaller manufacturers.

Specifically, CRN found that 21 percent of all solution providers questioned in August listed whitebooks as their most profitable brand, tying the segment with Dell and nudging it 1 percent above Hewlett-Packard. IBM, which manufactures the ThinkPad systems, followed with 14 percent of system builders listing it as their most profitable.

In the category of best-selling notebook, whitebooks also gained ground over the past year with 14 percent of solution providers listing them as their hottest notebook. HP and Dell were tied for first, at 22 percent, with IBM taking fourth at 13 percent.

Albert Wang, systems integration division head at ABS Computer Technologies, a system builder in Whittier, Calif., said he has noticed significant momentum moving toward whitebook adoption, and ABS has been taking advantage of it.

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"The trend of notebooks is tracking [sales] of desktops," he said. "We have the [whitebooks] out almost in desktop volume. It was 15 percent of our sales last year. Now, it's about 30 percent of sales. We see that trend continuing."

By year's end, ABS may see 35 percent of sales coming from its own whitebooks, Wang said. Technology advances available to system builders are a key factor driving growth, he said.

"The major thing driving this is that the notebook performance is increasing a lot, and also, the quality of the whitebook is almost matching the major players," Wang said.

For several years, many system builders had seemed reluctant to make the investment and take the time to develop a custom notebook offering. Recent upgrades in building blocks--including offerings from Intel and component providers such as Asus--have changed that thinking.

Last year, Intel and several distributors began aggressively developing and shipping whitebook building blocks, including chassis, motherboards and wireless cards, to system builders that for years had been reluctant to get into the custom notebook business.

"In order to compete with the big boys, we needed to make sure the quality matched up head-to-head, we were able to support it better than the tier ones, and we had price competitiveness," said Steve Garcia, vice president of sales and marketing at OmniPro Systems, Sacramento, Calif.