Is There a ‘Business-Rugged’ Market in the United States?
An assessment of the Market for Enhanced-Durability Notebooks
By Roger L. Kay
For many years, a few PC hardware vendors have mined a small but profitable niche supplying
rugged notebook PCs to customers — military personnel, policemen, firemen, emergency
medical technicians, off shore oil workers, field utility workers — who need a system that won’t
fail under any circumstances short of a direct hit by a 60mm shell.
Rugged is as Rugged Does
Chief among these suppliers has been Panasonic, an Osaka-based electronics manufacturer
(and subsidiary of Matsushita), which has made a business of owning the rugged category. At a
factory laboratory in Osaka, simulated fingers punch a test keyboard 25 million times in rapid
succession to test wear characteristics. Across the way, a notebook clamped to a spit-like
holder rotates slowly as a constant spray of water from something that looks like a lawn
sprinkler system soaks it from every angle hour after hour. Nearby, a machine resembling a pile
driver simulates drops from various heights. Panasonic takes the rugged business very
seriously. Breakage statistics show that the company’s rugged PCs fail significantly less often
than any other.
Unlike most PC vendors, Panasonic builds its systems in its own factories with its own
components. Ruggedness cannot be just bolted onto a PC as an afterthought. It has to be
engineered into the very soul of the machine. The required investment is high, and the price
points — 3x to 4x a normal PC of the same specifications — discourage all but the most
committed customers.
In terms of market share, if one were to isolate the rugged business in the United States alone,
Panasonic represents a significant proportion, something on the order of 20-25%. In fact,
before 9/11 it had much of the market to itself. Then the fear-mongering started, and a few
opportunistic companies got into the rugged game, notably Itronix, now a division of General
Dynamics. Itronix sold itself as an “American” company (read: you can trust us locals in this
dangerous world) and sold rugged systems primarily to the military for the Afghanistan and Iraq
campaigns.
Rugged’s Little Brother
More recently, there has been a new market development in the rugged space. A movement is
afoot to market some of that ruggedness on the cheap as a somewhat-rugged, nearly rugged,
rugged-ish, semi-rugged, or, now, “business rugged” (the latest term) PC. The idea is to give
the system some of basic rugged features, but not the most costly ones that make it able to
pass military specification tests. So, rather than spend 400% of normal cost for a notebook that
definitely won’t break, the buyer can get one for 150% of normal that probably won’t break. The
idea here, reasonably enough, is that people might be willing to pay for some assurance that
their PCs won’t break during normal use (in this case, “normal” could include spilling beer on
the keyboard in a hasty moment, or kicking the power supply cord during an instant of
forgetfulness and causing the notebook to fly off the table and onto the hardwood floor).
Vendors have been feeling their way on how much customers might pay for this class of
system. The general consensus is a premium of about 50%. Given how slender PC margins
are these days, a 50% delta, even when burdened with some extra ruggedization costs, would
yield a healthy bottom line.
An early entrant into the business-rugged category was Intronix, when it fielded a co-branded
system with General Motors’ Hummer Division in 2005. The Hummer laptop sold for $2,988
and came in macho colors like black and silver with yellow, red or grey trim. Priced not much
below Itronix’s fully rugged line, the Hummer sank like a stone in the marketplace. The three-
year agreement with General Motors didn’t even reach its completion, and the system was
decommissioned in March 2007.
Panasonic, however, has continued to ply these waters cautiously, looking for the magic
formula. Panasonic management understands that the sweet spot for this market is likely at a
lower price point and with fewer, or less stringently rugged, features. The ToughBook business-
rugged line starts between $1,725 to $3,100, depending on the model.
Another player in this game is Twinhead, a Taiwanese ODM-turned-OEM, which manufactures
the Durabook line. These notebooks have good basic rugged features and are priced between
$1,200 and $1,500. Although the company claims to “simulate” Military Standard 810F, it doesn’
t go so far as to claim certification.
Assault from Another Quarter
It would be a quiet little market, this business-rugged niche, if it weren’t for the fact that the
mainstream PC hardware OEMs — Dell and Lenovo, specifically — are targeting the same
buyers. While the traditional rugged guys have been moving down from above, the big
integrated PC hardware OEMs are moving up from below. They have noticed the better margins
in the business-rugged market, and are interested in adding this category to their portfolios.
Dell entered the market in January 2006 with its Latitude ATG (All-Terrain Grade; there go those
vehicle metaphors again.) notebook. The ATG passes some military standard specifications,
but not all, particularly the shock measures, and it has an outdoor-readable screen. The system
carries a premium over similarly specified Dell notebooks of about $500. Originally configured
with a shock mounted hard drive, the ATG got a midyear 2006 refresh of an optional 32GB solid-
state drive for a $550 cost adder.
In an interesting twist, Dell entered into an arrangement with Augmentix, a company located
near Dell’s Austin headquarters, to have Augmentix re-skin the ATG as the XTG (Extreme Terrain
Grade; where to from here? UTG — Universal Terrain Grade?). The XTG makeover involves
adding a magnesium alloy external housing and internal mounting to the Dell system as well as
bonding high-compression plastic to key drop-zone areas. Other measures include the
installation of a special thermal management system (all that enclosure could cause heat
problems), the injection of polycarbonate filler inside the frame (vibration resistance), and the
addition of various gaskets and reinforced hinges. The XTG is clearly a fully rugged notebook
and carries a commensurate starting price of $3,200.
Meanwhile, the perhaps under-sung hero of the business-rugged category is Lenovo, né IBM
Personal Computer Division, which has for many years been quietly building what it calls
“reliability features” right into its standard notebooks. With quaint names like “roll cage,” “shock
mounting,” and “air bag” (there we go with the automobile imagery again), the ThinkPad line
carries many of the features identified with the business-rugged category. The roll cage is a
magnesium alloy frame that surrounds major components. Its stiffness helps reduce popped
solder joints due to torque. Some models also feature a magnesium alloy cover to protect the
display as well. The rubber shock mounting keeps the hard drive intact on non-ballistic drops.
The air bag — actually called the Active Protection System — is a system that parks the hard
drive head when an accelerometer detects a certain velocity in any direction.
A number of other firms, including Apple, have adopted similar features in some of their recent
models.
HP did offer a re-badged fully rugged notebook from Itronix, buy no longer does.
Toshiba offers a Tecra with some rugged features.
Brass Tacks
Other than price-point manipulation, it seems difficult to determine what makes a notebook
rugged and what makes it partially rugged. The primary test is whether it meets various military
specifications. In practical terms, the distinction is about how hard the thing can be slammed
and still work. Of course, there are costs involved in building up durability, but it’s clear that
margins also rise with the ruggedness scale. Fully rugged notebooks are too expensive for
most people, but perhaps the testosterone set will pay a premium for at least the appearance of
ruggedness, if not the actual quality.
Here we see an interesting divergence in vendors’ strategies. Where Dell makes a lot of the
rugged look, Lenovo aims for the rugged actuality. Panasonic’s business-rugged notebooks
are both light and strong, and the only observable indication of any durable quality is the hump in
the lid, a structure stronger than a flat surface. Lenovo’s ThinkPads carry a slight premium, but
so far the company has not tried particularly hard to monetize its rugged features. Perhaps that’
s a mistake. However, Itronix’s experience with the Hummer shows that the testosterone
formula still needs tweaking. It would be legitimate to ask whether, given the rise in mobile
computing, some rugged features are now table stakes in the mobility game.
Just for completeness, here is a list of business- rugged features:
To meet the fully rugged designation, additional hardening is needed in the areas of protection
from the environment (absolute temperature, rapid temperature swings, humidity, vibration,
altitude), sealing against possible entry of dust and water, and damage from drops or shocks.
In Panasonic’s case, its business-rugged notebooks meet the same drop-testing standard as
its fully rugged models, the rationale being that dropping is one of the most common ways that
notebooks sustain damage. (And what good is a waterproof notebook if you broke it when you
dropped it?)
Two U.S. government standards cover the rugged specification: MIL-STD-810F (or “mil spec”)
and IP (ingress protection). While there are many elements to and levels of “mil spec”
standards, most rugged notebooks should have at least an IP54 rating, which means they’re
protected against dust particles and water.
Future Rugged Technologies
Several new or recently introduced technologies will tend to help the business-rugged case.
Solid State Drives
Flash-based hard drives with capacities of 64GB make this technology desirable for business-
rugged notebooks, but through the end of 2007, these capacities are still hovering around
$1,000 a piece. However, by the end of 2008, this premium is likely to drop to more like $300.
Not only are solid-state drives (SSDs) less likely to fail (no moving parts), but they also use less
power, one of the business-rugged requirements. Already, SSDs are being offered as options
in some models. As prices come down, these components will become more common.
Better Frame Materials
Another way to improve business-rugged notebooks is to turn to stronger, yet lighter frame
materials. Various companies are experimenting with carbon fiber, which is used these days
for high-end racing bicycles and other applications where both weight and strength are critical.
Issues with these materials include cost (the premium is still pretty high), friability (they tend to
shatter), and workability (they must be cast and finishing is difficult). Aside from lightness and
strength, an additional benefit of carbon fiber is that it doesn’t interfere with radio signals, which
makes it easier to design in embedded radios.
Communications
Already, many business-rugged notebooks carry special communications features like Global
Positioning Systems (GPSs). Since these notebooks spend a disproportionate amount of time
in the field (thus, the long battery life requirement), they need robust and multifarious
communications. Radio technology is improving, and fairly soon, hardware OEMs will be able to
pack as many as four radios into the same unit: Bluetooth for personal-area devices (external
mice, keyboards), 802.11n for powerful local-area connections, WiMAX or 3G for wide-area
access, and GPS for location-based services via satellite triangulation.
Market Size and Growth
Although it is difficult draw a clean circle around the current business-rugged market to
determine its size, today’s crop of business-rugged notebooks will likely add up to less than 1
million units shipped worldwide in 2007. However, some market watchers have cited growth
rates in the mid-teens for the next five years, a reasonable forecast. The implication is that the
category will solidify over time, and, as a result, awareness — and ultimately purchasing — will
increase. Thus, the market for business-rugged notebooks is likely to outgrow the overall
notebook market for the foreseeable future, albeit from a tiny base.
© 2007 Endpoint Technologies Associates, Inc. All rights reserved.
rugged notebook PCs to customers — military personnel, policemen, firemen, emergency
medical technicians, off shore oil workers, field utility workers — who need a system that won’t
fail under any circumstances short of a direct hit by a 60mm shell.
Rugged is as Rugged Does
Chief among these suppliers has been Panasonic, an Osaka-based electronics manufacturer
(and subsidiary of Matsushita), which has made a business of owning the rugged category. At a
factory laboratory in Osaka, simulated fingers punch a test keyboard 25 million times in rapid
succession to test wear characteristics. Across the way, a notebook clamped to a spit-like
holder rotates slowly as a constant spray of water from something that looks like a lawn
sprinkler system soaks it from every angle hour after hour. Nearby, a machine resembling a pile
driver simulates drops from various heights. Panasonic takes the rugged business very
seriously. Breakage statistics show that the company’s rugged PCs fail significantly less often
than any other.
Unlike most PC vendors, Panasonic builds its systems in its own factories with its own
components. Ruggedness cannot be just bolted onto a PC as an afterthought. It has to be
engineered into the very soul of the machine. The required investment is high, and the price
points — 3x to 4x a normal PC of the same specifications — discourage all but the most
committed customers.
In terms of market share, if one were to isolate the rugged business in the United States alone,
Panasonic represents a significant proportion, something on the order of 20-25%. In fact,
before 9/11 it had much of the market to itself. Then the fear-mongering started, and a few
opportunistic companies got into the rugged game, notably Itronix, now a division of General
Dynamics. Itronix sold itself as an “American” company (read: you can trust us locals in this
dangerous world) and sold rugged systems primarily to the military for the Afghanistan and Iraq
campaigns.
Rugged’s Little Brother
More recently, there has been a new market development in the rugged space. A movement is
afoot to market some of that ruggedness on the cheap as a somewhat-rugged, nearly rugged,
rugged-ish, semi-rugged, or, now, “business rugged” (the latest term) PC. The idea is to give
the system some of basic rugged features, but not the most costly ones that make it able to
pass military specification tests. So, rather than spend 400% of normal cost for a notebook that
definitely won’t break, the buyer can get one for 150% of normal that probably won’t break. The
idea here, reasonably enough, is that people might be willing to pay for some assurance that
their PCs won’t break during normal use (in this case, “normal” could include spilling beer on
the keyboard in a hasty moment, or kicking the power supply cord during an instant of
forgetfulness and causing the notebook to fly off the table and onto the hardwood floor).
Vendors have been feeling their way on how much customers might pay for this class of
system. The general consensus is a premium of about 50%. Given how slender PC margins
are these days, a 50% delta, even when burdened with some extra ruggedization costs, would
yield a healthy bottom line.
An early entrant into the business-rugged category was Intronix, when it fielded a co-branded
system with General Motors’ Hummer Division in 2005. The Hummer laptop sold for $2,988
and came in macho colors like black and silver with yellow, red or grey trim. Priced not much
below Itronix’s fully rugged line, the Hummer sank like a stone in the marketplace. The three-
year agreement with General Motors didn’t even reach its completion, and the system was
decommissioned in March 2007.
Panasonic, however, has continued to ply these waters cautiously, looking for the magic
formula. Panasonic management understands that the sweet spot for this market is likely at a
lower price point and with fewer, or less stringently rugged, features. The ToughBook business-
rugged line starts between $1,725 to $3,100, depending on the model.
Another player in this game is Twinhead, a Taiwanese ODM-turned-OEM, which manufactures
the Durabook line. These notebooks have good basic rugged features and are priced between
$1,200 and $1,500. Although the company claims to “simulate” Military Standard 810F, it doesn’
t go so far as to claim certification.
Assault from Another Quarter
It would be a quiet little market, this business-rugged niche, if it weren’t for the fact that the
mainstream PC hardware OEMs — Dell and Lenovo, specifically — are targeting the same
buyers. While the traditional rugged guys have been moving down from above, the big
integrated PC hardware OEMs are moving up from below. They have noticed the better margins
in the business-rugged market, and are interested in adding this category to their portfolios.
Dell entered the market in January 2006 with its Latitude ATG (All-Terrain Grade; there go those
vehicle metaphors again.) notebook. The ATG passes some military standard specifications,
but not all, particularly the shock measures, and it has an outdoor-readable screen. The system
carries a premium over similarly specified Dell notebooks of about $500. Originally configured
with a shock mounted hard drive, the ATG got a midyear 2006 refresh of an optional 32GB solid-
state drive for a $550 cost adder.
In an interesting twist, Dell entered into an arrangement with Augmentix, a company located
near Dell’s Austin headquarters, to have Augmentix re-skin the ATG as the XTG (Extreme Terrain
Grade; where to from here? UTG — Universal Terrain Grade?). The XTG makeover involves
adding a magnesium alloy external housing and internal mounting to the Dell system as well as
bonding high-compression plastic to key drop-zone areas. Other measures include the
installation of a special thermal management system (all that enclosure could cause heat
problems), the injection of polycarbonate filler inside the frame (vibration resistance), and the
addition of various gaskets and reinforced hinges. The XTG is clearly a fully rugged notebook
and carries a commensurate starting price of $3,200.
Meanwhile, the perhaps under-sung hero of the business-rugged category is Lenovo, né IBM
Personal Computer Division, which has for many years been quietly building what it calls
“reliability features” right into its standard notebooks. With quaint names like “roll cage,” “shock
mounting,” and “air bag” (there we go with the automobile imagery again), the ThinkPad line
carries many of the features identified with the business-rugged category. The roll cage is a
magnesium alloy frame that surrounds major components. Its stiffness helps reduce popped
solder joints due to torque. Some models also feature a magnesium alloy cover to protect the
display as well. The rubber shock mounting keeps the hard drive intact on non-ballistic drops.
The air bag — actually called the Active Protection System — is a system that parks the hard
drive head when an accelerometer detects a certain velocity in any direction.
A number of other firms, including Apple, have adopted similar features in some of their recent
models.
HP did offer a re-badged fully rugged notebook from Itronix, buy no longer does.
Toshiba offers a Tecra with some rugged features.
Brass Tacks
Other than price-point manipulation, it seems difficult to determine what makes a notebook
rugged and what makes it partially rugged. The primary test is whether it meets various military
specifications. In practical terms, the distinction is about how hard the thing can be slammed
and still work. Of course, there are costs involved in building up durability, but it’s clear that
margins also rise with the ruggedness scale. Fully rugged notebooks are too expensive for
most people, but perhaps the testosterone set will pay a premium for at least the appearance of
ruggedness, if not the actual quality.
Here we see an interesting divergence in vendors’ strategies. Where Dell makes a lot of the
rugged look, Lenovo aims for the rugged actuality. Panasonic’s business-rugged notebooks
are both light and strong, and the only observable indication of any durable quality is the hump in
the lid, a structure stronger than a flat surface. Lenovo’s ThinkPads carry a slight premium, but
so far the company has not tried particularly hard to monetize its rugged features. Perhaps that’
s a mistake. However, Itronix’s experience with the Hummer shows that the testosterone
formula still needs tweaking. It would be legitimate to ask whether, given the rise in mobile
computing, some rugged features are now table stakes in the mobility game.
Just for completeness, here is a list of business- rugged features:
- Magnesium alloy case
- Magnesium alloy lid enclosure
- Reinforced steel hinges
- Shock-mounted hard drive
- Spill-resistant keyboard with durable keys
- Flexible internal connectors
- Port protection (covers)
- Embedded wireless radios and antennas
- Long battery life
To meet the fully rugged designation, additional hardening is needed in the areas of protection
from the environment (absolute temperature, rapid temperature swings, humidity, vibration,
altitude), sealing against possible entry of dust and water, and damage from drops or shocks.
In Panasonic’s case, its business-rugged notebooks meet the same drop-testing standard as
its fully rugged models, the rationale being that dropping is one of the most common ways that
notebooks sustain damage. (And what good is a waterproof notebook if you broke it when you
dropped it?)
Two U.S. government standards cover the rugged specification: MIL-STD-810F (or “mil spec”)
and IP (ingress protection). While there are many elements to and levels of “mil spec”
standards, most rugged notebooks should have at least an IP54 rating, which means they’re
protected against dust particles and water.
Future Rugged Technologies
Several new or recently introduced technologies will tend to help the business-rugged case.
Solid State Drives
Flash-based hard drives with capacities of 64GB make this technology desirable for business-
rugged notebooks, but through the end of 2007, these capacities are still hovering around
$1,000 a piece. However, by the end of 2008, this premium is likely to drop to more like $300.
Not only are solid-state drives (SSDs) less likely to fail (no moving parts), but they also use less
power, one of the business-rugged requirements. Already, SSDs are being offered as options
in some models. As prices come down, these components will become more common.
Better Frame Materials
Another way to improve business-rugged notebooks is to turn to stronger, yet lighter frame
materials. Various companies are experimenting with carbon fiber, which is used these days
for high-end racing bicycles and other applications where both weight and strength are critical.
Issues with these materials include cost (the premium is still pretty high), friability (they tend to
shatter), and workability (they must be cast and finishing is difficult). Aside from lightness and
strength, an additional benefit of carbon fiber is that it doesn’t interfere with radio signals, which
makes it easier to design in embedded radios.
Communications
Already, many business-rugged notebooks carry special communications features like Global
Positioning Systems (GPSs). Since these notebooks spend a disproportionate amount of time
in the field (thus, the long battery life requirement), they need robust and multifarious
communications. Radio technology is improving, and fairly soon, hardware OEMs will be able to
pack as many as four radios into the same unit: Bluetooth for personal-area devices (external
mice, keyboards), 802.11n for powerful local-area connections, WiMAX or 3G for wide-area
access, and GPS for location-based services via satellite triangulation.
Market Size and Growth
Although it is difficult draw a clean circle around the current business-rugged market to
determine its size, today’s crop of business-rugged notebooks will likely add up to less than 1
million units shipped worldwide in 2007. However, some market watchers have cited growth
rates in the mid-teens for the next five years, a reasonable forecast. The implication is that the
category will solidify over time, and, as a result, awareness — and ultimately purchasing — will
increase. Thus, the market for business-rugged notebooks is likely to outgrow the overall
notebook market for the foreseeable future, albeit from a tiny base.
© 2007 Endpoint Technologies Associates, Inc. All rights reserved.
Just Don't Use it to Stop Bullets
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