10 February 2009

Dell Joins Netbook Race to Bottom

There are two schools of thought about netbooks. The first is that they are simply another kind of notebook - smaller, a bit cheaper, but otherwise nothing really new. The second is that they are a completely new market sector - a view that I have been propounding for almost as long as they've existed

One indication that they are distinct is that the prices of netbooks are still falling rapidly - and will continue to fall. That's in contradistinction to notebooks, where prices tend to be much more stable, but features are added over time. The netbook is about *minimum* acceptable functionality, while notebooks are about achieving near-desktop capabilities (themselves constantly improving) in a package that's portable.

Here's another proof-point:

Dell fires back at the Taiwanese market leaders with the Mini 9n. Starting at just $250, this Ubuntu netbook is easily one of the cheapest on the market from a brand-name manufacturer.

The catch? The netbook only comes with 512 MB of RAM and a 4 GB hard drive. But remember it uses Ubuntu, which runs significantly more efficiently than Windows. This means of course that it can only run Linux programs but give me Firefox and Open Office and I can conquer the world.

This is just what notebook manufacturers fear: a "race to the bottom", as Sony so memorably put it. Dell's participation in that race will send shivers down the spine of manufacturers who thought they could ride the netbook wave with their low-end notebooks.

Do I hear $200?

13 comments:

Anonymous said...

If you happen to live in the UK, you can pick up a Mini 9 with 512MB and 4G SSD for just £249.

It makes you wonder how Dell do their conversion to Sterling. I suspect it's by changing the symbol at the front.

glyn moody said...

Mind you, with the way the pound's going, that might be a fair price soon...

amd-linux said...

Glyn,

check out this offer here in Germany:

http://www.one.de/shop/product_info.php?cPath=213_214&products_id=2667

This netbook is not really high-end (based on a very low-end reference design from Quanta), but for 149 Euro (!!! new, not refurbished!) you can't be too wrong.

It also comes with Ubuntu preinstalled and is now also being sold on Amazon.de.

The air gets thinner for MS and its Windows tax - even 20 euros for Win XP Home is a lot in this price regions.

glyn moody said...

Interesting. Modem but no wifi, it seems; still, pretty amazing.

hasAnEEEpc said...

amd-linux,

I would not touch that 149euro netbook for 4 reasons:

1: 7" screen, means max 800x480 - all current netbooks have 8.9" screens for 1024x768 - makes a huge difference
2: Via C7 CPU really lacks in power (read about the Dell 2133 to get an idea about this)
3: Only 2Gb SDD: hard to install anything on that...
4: it's fugly! (well, that's my opinion anyhoo...)
The price is ridiculous, but honestly, you would not be getting your money's worth...

glyn moody said...

I think it's horse for courses. I've used 7" systems - they're not suitable for writing novels on, but for browsing, they're fine.

Anonymous said...

@hasAnEEEpc

I agree with you that the specs are extremely low-end, most of us have no need for such a machine.

But the machine might play an important role as a price breaker - it will sooner or later slip below 100 Euro (150 USD) - by this summer, me thinks.

You might find such machines then for sale in your local supermarket or on the rummage table of your department store, at this price, like you find cheap mobile phones in such places.

For this price, you buy one for your son, one for your daughter, one for mom, and maybe one for grandpa, eliminating any margins for MS and Windows.

They then need to give away Windows essentially for free to prevent a landslide, as they had to cut the Windows prices in order to stop it when the EEE arrived.

I know it sounds a little bit exaggerated, but this machine IMHO has the potential to seriously harm MS in a not too distant future.

glyn moody said...

Exactly: it becomes an impulse buy. and perfect for children, too.

mjjzf said...

Still, I noticed some harsh words from Dan Lynch from Linux Outlaws on the topic of Dell and Ubuntu.

glyn moody said...

Dell's certainly not perfect, but we need them to help spread the word among general users.

Anonymous said...

If 512MB means upgradeable and 4GB means upgradeable I would love to buy it. Otherwise it is a NO-GO

Regards
Vasileios

zaine_ridling said...

Glyn, you make some very good points on netbooks vs. notebooks. But Moore's Law surely applies to netbooks. As they become more powerful, users will expect more of everything (except size).

In my mind, there's a cutpoint where a netbook becomes less attractive: on the high end, you're pushed to spend extra and simply buy a notebook; on the low end, the machine doesn't offer enough to make it worth even £200. Take the average notebook price right now, say $600/£860, and split that price for a good netbook. There's a sweet spot where a netbook is a great value, and the extremes make you say, "meh."

Seems right now that HP, MSI, et al., are selling netbooks with Linux on them at almost the same price as XP and pocketing the profit. Is that the case, or is Microsoft handing out XP licenses for free on netbooks?

glyn moody said...

@zaine: Moore's law can be interpreted in two ways: more power for the same price, or the same power for lower price.

I'm saying that there's a configuration that's good enough for GNU/Linux (which is highly lean), that we can use as a netbook base, and that the cost of that will tend to zero (well, say, under £70/$100).