“You’d be hard-pressed to find a more perfect tech product for a global recession than the ‘netbook,’ a rapidly emerging category of low-cost notebooks. Often priced under $500, netbooks provide plenty of computing power to surf the Web, use e-mail and do other routine tasks. These machines are just the thing for someone looking for a cheap way to join the mobile-computing revolution,” Eric J. Savitz reports for Barron’s.
“Asian PC makers Asus and Acer have moved aggressively into the market, with a host of low-cost laptops, many powered by Intel’s low-cost Atom microprocessor. And Hewlett-Packard and Dell are rapidly catching up. Late last week, seven of the top 10 best-selling laptops on Amazon.com were priced under $600; the list included models from Acer, Asus, Toshiba and HP,” Savitz reports. “(The other three laptops on the top 10 list are from Apple, and are at the other end of the price curve.)”
“For the PC companies, the netbook revolution is fraught with danger. As they target volume, they risk damaging their margins. (Apple, as I noted here a few weeks ago, has declined to enter the netbook market.) The danger is that many people who’d otherwise buy more expensive laptops will find that netbooks are all they need,” Savitz reports.
Savitz reports, “In short, the netbook’s rise is likely to be accompanied by cannibalization of more expensive PCs, battering margins.”
Full article here.
This particular downturn is not creating a market of cheaper computers. That market has existed for some time and there are parts of that market that we choose not to play in.
I think when people want a product of the class that we make, over and over again people have done the price comparisons and we’re actually quite competitive. So we choose to be in certain segments of the market and we choose not to be in certain segments of the market. And the question is is the downturn going to drive some of our customers to those lower segments of the marketplace and get to buy lesser products? And I will be surprised if that happens in large numbers and I actually think that there are still a tremendous number of customers that we don’t have in the Windows world or in the other 99% of the phone market we don’t have who would like to and can afford to buy Apple products. So we’ll see what the ratio of those two things are but we’re not tremendously worried.
As we look at the NetBook category, that’s a nascent category. There’s as best as we can tell not a lot of them getting sold. You know, one of our entrants into that category, if you will, is the iPhone for browsing the Internet and doing e-mail and all the other things that a NetBook lets you do, and being connected via the cellular net wherever you are, an iPhone is a pretty good solution for that, and it fits in your pocket. But we’ll wait and see how that nascent category evolves and we’ve got some pretty interesting ideas if it does evolve.
What we want to do is deliver a lot, an increasing level of value to these customers. There are some customers which we choose not to serve. We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that. But we can continue to deliver greater and greater value to those customers that we choose to serve and there’s a lot of them. And we’ve seen great success by focusing on certain segments of the market and not trying to be everything to everybody. So I think you can expect us to stick with that winning strategy and continuing to try to add more and more value to those products in those customer bases we choose to serve. – 8Apple CEO Steve Jobs, October 21, 2008
Seeing the Acer Netbook in Costco last week was a wake-up call for me. It is a lot of computer for $350: 1.2GHz CPU, 1024 x 600, 1GB RAM, 60GB HD, 802.11B/G, camera & mic, card reader, Ethernet, VGA video out, 2.6 lb, Win XP. For Windows users, form factor is perfect for tossing in a carry-on bag and having ones entire computing environment available at all times.
As a committed Mac user I’m not planning to buy the Acer product, but this is absolutely what I’m looking for on the Apple / Mac OS X platform. The iPod Touch / iPhone is almost there in many ways, but misses the boat in others that would be mostly solved if the iPod platform was full Mac OS X and a bit larger.
What keeps me from buying the Acer? Beyond preferring OS X and Mac apps, I like the integration of an all-Mac network – LAN, MobileME (cloud), sync, software family versions. Having retired the last Win PC from my network a year ago, I have no desire to go back.
Why would I buy the Acer? For such a low price, it does the communication basics well plus has a bit more real estate for occasionally working with documents. I would use it mostly standalone without much integration with my Mac network.
But I think we’ll see some exciting new products in this category from Apple next year so I’m willing to wait a bit longer. My dream device is a true Mac OS X tablet in a netbook form factor, with wifi, bluetooth headset / keyboard / mouse support plus an accessory 3G module that plugs into the cardbus slot. This can be an $800 device if it’s built like a brick.
” width=”19″ height=”19″ alt=”wink” style=”border:0;” /> A high-res video port, wireless remote, and accessory LED mini projector would be nice for doing presentations.