Will Cheaper Laptops Snuff Out Netbooks?

Dell CEO Michael Dell said that disillusionment with netbooks kicks in after about 36 hours. Assuming Dell’s right, and he may be, does that mean cheap laptops in the $399 range will trump them?

Speaking at the Churchill Club Tuesday night (Techmeme), Dell said that the appeal of netbooks—they are small and light—wears off after a few hours as users want their bigger screens back. I can attest to Dell’s take since I had the exact same reaction and now my daughter has a fine Dell Mini.

But all the people buying netbooks can’t be completely disillusioned right? Adrian Kingsley-Hughes notes that it’s in Dell’s (DELL) best interest to trash netbooks at least a little since they hit profit margins. That’s true, but the more interesting issue comes when consumers see full-featured, larger screen notebooks that cost about the same as a netbook. Will you go for the 15.6 inch screen for $399 or the Dell Mini 10 that will run you $349?

Christopher Dawson summarizes the conundrum for education IT buyers:

At $399, Compaq’s latest inexpensive laptop (right) offering starts looking pretty attractive. When most netbooks are in the $250-$300 range, doesn’t it make sense to just get real laptops for those 1:1 programs? How about making sure that teachers have portable computing facilities so they can work from home or roam between student groups with a wireless PC? Is the downward push of prices on “real laptops” going to make netbooks irrelevant where they once appeared to be the answer to sustainable and realistic 1:1 efforts?

Teachers will certainly be asking about these ultra-cheap, full-sized laptops.

You can substitute teachers and IT buyers for consumers and say the same thing. What happens when cheap laptops are stacked up against netbooks? It’s quite possible that the cheap laptops win—assuming you’re not lugging them everywhere.

And that brings me to the Compaq brand. Hewlett-Packard (HPQ) bought Compaq near the beginning of the decade and has kept the brand as a value PC brand. The pitch is that Compaq just gives you the PC you need.

The message—in spite of my shock that Compaq is still around—resonates. Will the “more laptop for your money” line mean the end of netbooks? It’s possible, but first consumers would have to stop chasing newfangled form factors with nice colors.

Comments

[PastTense:]

If you can sell cheap laptops at $399, then someone should be able to sell cheap netbooks for a couple hundred dollars--so netbook prices will be coming down too (and netbooks might even be "free" (as the cell phone companies call it--where you spend almost nothing for the netbook and get locked into a cell phone contract for a couple thousand dollars for the two years of cell phone service).

While I am a strong believer in bigger screens for myself, perhaps you should why so many people like smartphones--with everything very small.

Oct 14 12:28 PM

[CMS:]

I recently purchased a $500 laptop with a 17" screen and have to say, I can't see a netbook taking over.. the screens are too small.

Oct 15 11:30 AM

[Kris Tuttle:]

A smartphone, netbook, laptop for every user. Or in cases like me for every use case, I bring a netbook sometimes when on the go but need to take notes, use cloud apps and so on but still need a powerful laptop to run applications on a larger screen (plus usually an external display as well.)

I bet netbooks helped the laptop makers get more serious about lowering price points. It's also made it easier to buy computers for kids or interns which often went without.

My guess is that this puts some pressure on the high-end laptop prices given what you can get for $1000 there. But I'm no PC analyst.

Oct 15 01:41 PM

[tidy bownl man:]

I want a $500 laptop with 13" screen that weighs less than 4 pounds.

Oct 15 01:47 PM

[tweaks:]

One word: Airplanes. We are trying a netbook out with one of our salesmen and he just carries it around like it's a pet! ;-)

He can plug it into his Blackberry on the tarmac and work. I'll have to take it off his cold, dead body.

Oct 15 02:53 PM

[tripleblack:]

Laptops around $300-400 leave very little headroom for netbooks even at $200. Their only hope is to ride in as an oversized PDA, and the market for that is limited.

With the Iphone now priced lower, the pressure will be tough for the netbooks.

I just spent too much time at a phone store, but one good thing that came from it was a little market research, ie, that NOT A SINGLE customer in the busy store was spending any time with the kiosk of netbooks.

Oct 15 02:56 PM

[Marc Gerstein:]

Netbooks aren't necessarily about being cheap. They're about being small. I have a 10.1" Lenovo with a 160 GB hard drive and 2 GB of memory and a long-life battery for which I paid $400. Using my external CD drive to load software, it can do everything, and I mean EVERYTHING my full-feature laptop can do and just as quickly. And it's highly portable. I even did a few hours of work in a coach airline seat even though the person in front of me reclined all the way back.

I've heard the new generation of big laptops described as "desktop replacements" and they are; that's my main work computer. Going further, the new generation of netbooks (the ones that can do everything, not just surf the net) are "laptop replacements" taking over the portability function forfeited by the desktop replacements.

Oct 15 05:28 PM

[thenat:]

I think netbooks are a waste of time, there are so many more functions on laptops at very reasonable prices, I saw a great Dell Laptop with everything for only $499 at Walmart

Oct 15 09:11 PM

[colodude:]

My HP Netbook Mini that I got at V...zon for $200 plus $60/month may or may not be chump change over time. I get the right to download 5Gb per month; so far I've exercised 10% of that option at most. The Atom processor handles WinXP just fine, but I I'll wait for Win7 Starter Edition SP1 before upgrading. The USB optical mini-mouse with scrolling wheel keeps my screen navigation plenty fast.

I've also own/owned Palm Treos and most of the machines after the Pilot, Acer tablets, and big laptops. I sure hit F11 on the Netbook a lot, but it does the job. I'd have to say the Netbook feels safest in my hands (probably why that salesman makes it his stuffed pet), runs OpenOffice just fine, handles Google calendar, Cable Co. email, and my online stock trading software just fine. In other words, it's my favorite personal machine of all time. I'm about to try it as a "brick" at home with my existing 17" monitor, wireless MS keyboard and mouse, and see what gains in ease of use accrue.

Oct 16 12:52 AM

[ecoco:]

Most of us grownups seem to forget a major market segment, OUR KIDS, I have three of them and they all prefer the smaller lighter longer battery life netbooks, and for me I bought 3 for the price of a decent laptop, and I don’t get the kids to fight over computer usage.

As for us grownups, netbooks are a very useful on the move, they are light and have much longer battery life, I would not consider traveling or even visiting a friend carrying 15.4” notebook.

The sad thing is Dell, Apple, Sony and many other BIG names underestimated the market potential of netbooks, they are both angry and jealous as they lost market share to the likes of Asus, Acer, Samsung and LG.

The next generation of netbooks are on the way, smarter, powerful with more storage and a larger higher resolution 12” LCD panel. The 1st generation had a limitation imposed by Microsoft XP license agreement to limit screen size and processing power (to protect Vista), this I believe is no longer the case.

As I see it, Desktops are dead and are to be replaced by laptops. Netbooks are to replace cheap laptops and stupid PDA’s for people on the move.

Finally, I can say the overall winner is INTEL who captured 100% market dominance over AMD in this market segment.

Oct 16 02:59 AM