With CES now wrapped up and all of us home or headed home, Anand has tasked each of us with putting together some thoughts on what we saw at CES and where the market is headed. I’ve discussed much of what I’m going to say here in our recent podcast, but with my area of focus being laptops I’ve got both good news and bad news. Let’s start with the good news.

Last year at CES 2012, I gave my thoughts on some of the most exciting products of the show for me. Chief among these were the Lenovo Yoga, ThinkPad X220, and the Sony VAIO SE, both of which shared a common trait: IPS display panels. They were really the only two laptops I saw one year ago with IPS panels, and it was frustrating to see displays improving on other devices while the laptop languished in mediocrity. I read a book recently where the question was posed: what’s the opposite of success? If you answered failure like so many do, you’re only correct if we’re speaking in terms of the English language antonym. The author of that book posited—and I wholly support his position—that the opposite of success is mediocrity, and in fact if you want to succeed, your best bet is to increase your rate of failure. The people and companies that succeed don’t do so by accident; they do so by repeatedly trying, and in the process that might mean one, two, or many failures.

This year at CES 2013, not only have we reviewed several IPS equipped laptops over the past year, but there were numerous laptops on display where it’s apparent that the OEMs are finally starting to get the importance of display quality. The race to the bottom hasn’t finished, sadly, but with displays the OEMs are finally being forced into recognizing how critical the component that you stare at whenever you use a device really is. A walk through Intel’s booth for example had well over a dozen different Ultrabooks and laptops on display; many of these—and in particular the hybrid laptop/tablet devices—are now using IPS panels, or some other equally viable wide viewing angle technology (*VA or PLS). As such laptops begin to occupy retail space next to the budget TN panels, hopefully there will be enough uptake of the laptops with improved displays that we can finally halt the downward spiral we’ve been on in that area.

The bad news is that the reason we have this trend towards better displays is almost completely attributable to tablets. When consumers look at a $300-$400 tablet and see wide viewing angle displays with decent colors and good contrast and then they look at laptops with low-end TN panels, their eyes tell them all that they need to know about which looks better. The problem is that more and more people are shifting to tablets, and once they leave they’re basically gone for good. I said something similar to quite a few of the vendors that I met with, and the message bears repeating: if tablets offer better displays, better build quality, better features, and an overall better experience, for many people a $400 tablet (or $500 with a keyboard of some form) is the far more sensible choice.

I don’t think everyone will end up using tablets and smartphones in place of laptops, at least not in the near future, in part because many of us older folks just don’t have the vision to deal well with smaller screens. However, I also don’t think we’re anywhere near the final equilibrium in terms of tablets vs. laptops, and when we reach that point I suspect that tablets will be outselling laptops in the market just like laptops are outselling desktops today. The best way to stem the tide of departing laptop users is to improve the value of what they’re getting—not only by cutting the price of laptops, but also by offering better features and quality. Better displays, especially touchscreens, are a good way to keep people buying laptops. Better battery life and a more consistent user experience (e.g. good SSDs) also help. But mark my words: just as the netbook market has essentially imploded, going from dozens of netbooks from every conceivable manufacturer to essentially none at this CES, the budget laptop market is likely to do the same. Tablets are there to pick up the users, and the only real question is will those tablets be running Windows, Android, or iOS.