Sub-$300 Laptops: Where the Action Will Be

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 |  Includes: BBY, DELL, HPQ, INTC, MSFT
by: Kevin Maney

Right now, there seems to be at least one tech company that is incredibly positioned to take advantage of the crappy way we all feel about the economy -- and that would be Taiwanese computer maker Asus.

Not even a year ago, I stopped in at the Intel booth at the Consumer Electronics Show in Las Vegas, and the Intel (NASDAQ:INTC) folks showed me a prototype of a new Linux-based, tiny Asus laptop that ran on Intel's new low-power, low-price Atom chip. When they told me it was supposed to cost between $300 and $500, I almost flipped. And Intel seemed very excited about the possibilities.
 
Here we are now, and Asus -- which has been getting attention all year for its low-priced EeePC line -- just came out with a $299 machine it's selling at Best Buy (NYSE:BBY) The latest PC industry numbers from Gartner Group make it clear that this low end is where the big action is. The big guns of the PC industry -- H-P (NYSE:HPQ) and Dell (NASDAQ:DELL)-- don't have anything in that segment. If the economy stays down and people seek low-cost alternatives to the usual $1,000 laptops, this could act as a slingshot for Asus.
 
Not to mention Linux. So far, Linux on PCs has been a non-starter. But Asus and other mini-laptops may be the vehicle that puts Linux in front of Joe the Plumber types of users. Sounds like a whole new challenge for Microsoft (NASDAQ:MSFT)...