'small is beautiful'-the developing net-book & net-top market
Encountered this article today (24-7-08) on the developing net-book & net-top market, the same that gave us the $300 Asus Eee PC.
Fad or trend?? You decide...
http://www.nytimes.com/2008/07/21/te...l?ref=business
Smaller PCs Cause Worry for Industry
SAN FRANCISCO — The personal computer industry is poised to sell tens of millions of small, energy-efficient Internet-centric devices. Curiously, some of the biggest companies in the business consider this bad news.
In a tale of sales success breeding resentment, computer companies are wary of the new breed of computers because their low price could threaten PC makers’ already thin profit margins.
The new computers, often called netbooks, have scant onboard memory. They use energy-sipping computer chips. They are intended largely for surfing Web sites and checking e-mail. The price is small too, with some selling for as little as $300.
The companies that pioneered the category were small too, like Asus and Everex, both of Taiwan.
Despite their wariness of these slim machines,
Dell and Acer, two of the biggest PC manufacturers, are not about to let the upstarts have this market to themselves.
Hewlett-Packard, the world’s biggest PC maker, recently sidled into the market with a hybrid of a notebook and netbook that it calls the Mini-Note.
Several makers are taking the low-powered PCs one step further. In the coming months, they are expected to introduce “net-tops,” low-cost versions of desktop computers intended for Internet access.
A Silicon Valley start-up called CherryPal says it will challenge the idea that big onboard power is required to allow basic computing functions in the Internet age. On Monday it plans to introduce a $300 desktop PC that is the size of a paperback and uses two watts of power compared with the 100 watts of some desktops.
It wants to take advantage of the trend toward “cloud computing,” in which data is managed and stored in distant servers, not on the actual machine.
Industry analysts say that the emergence of this new class of low-cost, cloud-centric machines could threaten titans like
Microsoft and
Intel, or even H.P. and Dell, because the giants have built their companies on the notion that consumers want more power and functions built into their next computer.
Some of the big computer companies put a positive spin on the low-cost machines, saying they welcome new categories. But they would just as soon this niche did not take off, given the relatively low profit margins.
“When I talk to PC vendors, the No. 1 question I get is, how do I compete with these netbooks when what we really want to do is sell PCs that cost a lot more money?” said J. P. Gownder, an analyst with
Forrester Research.
Even as some PC vendors are jumping into the fray, others say they are resisting. Fujitsu, one of the world’s top 10 personal computer makers, said that it believes the low-cost netbook trend is a dangerous one for the bottom line.
“We’re sitting on the sidelines not because we’re lazy. We’re sitting on the sidelines because even if this category takes off, and we get our piece of the pie, it doesn’t add up,” said Paul Moore, senior director of mobile product management for Fujitsu. “It’s a product that essentially has no margin.”
Stan Glasgow, chief executive of Sony Electronics, said, “We are not looking at competing with Asus.” But he said the company is investigating what consumers want in a second PC.
It is a market that caught the major computer companies — both hardware and software — by surprise after Asus, entered the market last year with the $300 Eee PC. The company thought the device would essentially appeal to the education market, or as a starter laptop for adolescents, but the interest has turned out to be broader.
With an emphasis not in on-board applications (like word processing), but Internet-based ones like
Google Docs, the Linux-based Eee PC sold out its 350,000 global inventory. It has been in short supply ever since, said Jackie Hsu, president of the American division of Asus. Everex has sold around 20,000 of its CloudBook, which sells for about $350.
The sales are a veritable drop in the bucket compared with the 271 million desktop and laptop PCs shipped globally last year. But there is an intensifying debate about how big the category can become, and what segment of the market finds these computers appealing. ..
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http://www.nytimes.com/2008/07/21/te...l?ref=business