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By Graham Earnshaw

TOKYO, Sept 3, Reuter – Portable “lap-top” computers which can be used on planes or in hotel rooms may eventually become mass market products, stock analysts say.

They are being used increasingly by businessmen, journalists, travelling salesmen and even civil servants who need to use a computer outside their offices.

Last month, the U.S. Department of Defence made what was probably the biggest single purchase of lap-tops, buying 90,000 from the U.S. firm Zenith Electronics Corp.

“The Defence Department contract meant that a niche for the lap-top has been established,” said Salomon Brothers computer analyst Carole Ryavec.

“At present they are a small slice of the market, but it is being expanded. It could go well beyond five per cent of the personal computer market, up to as much as 10 per cent,” she added.

The machines are still expensive, usually between 2,000 and 3,000 dollars each, but their attractions are clear.

“They are so much smaller,” said Peter Wolff, analyst with Prudential-Bache Securities. “They make the thing on my desk look like a dinosaur, and they have basically the same functions.”

The price of lap-tops could come down as production and the number of manufacturers increase, analysts say.

There are still problems — many of the machines are too heavy to carry around comfortably, some have no batteries, and the screens on many are small and difficult to read.

But some portables now include hard-disk drives, providing large data storage capacity, and the screens have improved markedly from the first liquid crystal displays.

Analysts said they expected further developments in lap-top computers, most importantly the use of static memory chips which consumed less power than the dynamic chips now in use.

The static chips will mean smaller batteries, and help to make the machines lighter and more compact.

Other firms are also expected to enter the market as it grows.

“Toshiba is clearly the leader at present, but I think a lot of other companies will be putting on the heat,” said Wolff.

An analyst estimated Japanese firms make 80 per cent of all lap-tops sold, and even the Zenith computers for the Pentagon are expected to be made by Sanyo Electric in Japan.

But Japanese computer makers trying to sell to the biggest market, the United States, have been hit hard since Washington slapped a 100 per cent tax on lap-tops in May in retaliation for alleged dumping of semi-conductors by Japanese firms.

Last year Toshiba was producing 15,000 lap-tops a month, 10,000 for the U.S. market and 5,000 for Europe.

But a Toshiba spokesman said all production for the U.S. market had ceased.

“As long as the retaliatory tariffs on personal computers are in place, the only way these companies can sell in the United States would be to produce locally,” said analyst Wolff.

NEC Corporation, which dominates the domestic computer market in Japan, began producing 5,000 lap-tops a month in a plant in Georgia in June and Toshiba will begin assembling machines in California later this month.

Salomon Brothers’ Ryavec said the lap-top’s size and portability made it a product with a bright future both in government and business and among individuals.

“There is a very high potential for it to be become a mass market product. But the manufacturers need corporate orders to justify the levels of production which would bring prices down far enough to make it a mass market product,” she said.

But will the day come when everyone will carry a small computer round with them?

“I don’t know. I don’t see why the average guy driving a taxi is going to need it,” said Wolff.

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