Out of the Box

You can continue to deride netbooks as underpowered toys if you like, and I agree with many of my fellow analysts that they will account for a niche in overall PC shipments this year, but there’s no doubt that netbooks are challenging the PC status quo in many ways — “retro” and alternative operating systems, newcomer brands such as Sylvania, and interesting distribution potential, such as via cellular operators.

Dell is definitely positioning these products in an advantageous way by offering its Inspiron Mini for $99 with purchase of a select other PC, reinforcing the message that this is a sort of computing peripheral. (Dell has offered similar promotions on monitors and printers in the past.) It’s also a fresh arrow for the company to tuck into in its challenged upsell quiver. Of course, I’ve argued previously that the lower-cost Linux configuration lives up to that designation better.

Share This

Speaking of proportions, according to OC Register, Averatec will enter the netbook market this fall with what looks like a pretty well-equipped netbook with a nice design as well, and available at retail for under $500 this holiday season.

I’ve had the opportunity to get hands-on with a number of these products and am coming to favor those with 10″ screens, at least aesthetically, for a few reasons. First, they simply look less toy-like, a complaint I’ve heard levied a number of times against other netbooks. Second, they address the problem of either having a cramped or compromised keyboard versus having an unusually large bezel around the screen, thus resulting in a better-proportioned look. I have some concern about 10.2″ models being a bit less portable than, the 8.9″ variety that has attracted much interest, but these should still be ideal airline tray companions.

Share This

In a piece that casts doubt on the future of the (sigh) “netbook” market, Matt Richtel curiously provides quotes from Sony Electronics and Fujitsu, two of the more successful companies selling high-end ultraportables in the U.S., but doesn’t include any quotes from companies that have actually launched these products here, including HP and Asus.

It’s not surprising that Sony and Fujitsu would be relatively down on inexpensive ultraportables because their products are the most immediately threatened by inexpensive notebook PCs with small screens. Really, though, they needn’t worry, because anyone willing to invest $1,500 or more for a high-end ultraportable isn’t going to downgrade to this product.

In other words, at least in the UI.S., netbooks are about market expansion at a time when consumers are going more mobile. HP at least is thinking about these products in the right way, targeting students and other select demographics who need light computing on the go. Is that 10 percent of the notebook market for the next two years? Probably not. But as Tim Bajarin aptly notes in the Times piece, when you are at the scale of an HP or Dell, you’re not going to surrender shelf space or mindshare to an unknown Asian upstart.

It’s all well and good to pursue margin, but there’s no margin in a market that doesn’t yet exist. While we will see barebones Linux configurations for  $300 or $400, more of the market is going to be closer to $500 or $600 where major manufacturers move plenty of Windows notebooks, many of which have at least some higher component costs.

This fall, we’re going to see a lot of activity in this market.. it’s going to get pretty bloody fast. And to be clear, the space between the smartphone and notebook PC has been a difficult one to fill. But it’s very difficult to ascertain the true potential of this device because their real opportunity is in a world of integrated, affordable broadband wireless access, an evolution of the explosive growth notebooks saw after Wi-Fi became popular.

Share This