Sure, netbooks are by definition low cost computers that have lower profit margins than many other computers. But that doesn’t necessarily mean that they’re going to kill profits at the major computer, processor, and software companies. Intel’s Mooly Eden and Microsoft CEO Steve Ballmer have both recently come out swinging with claims that netbooks aren’t cannibalizing the sales of larger machines and won’t eat into profits long-term.
Of course, Microsoft does claim the popularity of netbooks is one reason the company experienced its first ever drop in revenue during the last quarter. But in the long run, Ballmer says Microsoft sees a lot of opportunity in the growing ultra-thin laptop space. This would cover laptops from 11 to 13 inches, possibly with Intel CULV processors or other CPUs and graphics processors that offer better performance than Intel Atom-based netbooks, but which come at a higher price and which will include more expensive versions of Windows.
Meanwhile, Intel mobile platform director Mooly Eden has been busy explaining how the vast majority of people buying netbooks are picking them up as secondary machines, not as replacements for higher end systems. That’s despite the fact that many of you have already made it clear that you think netbooks are good enough for use as an everyday computer.
What do you think? Are these guys right, or just trying to convince themselves (and their investors) that they are?
It’s also possible that tech companies will be able to make up revenue another way. While netbooks may be driving down overall prices for computers and software, they’re cheap enough that they could sell far better in the long run. If you can pick up a computer for around $300, not only might you be more likely to buy one as a second or third machine, but you might be more willing to replace your computer every year or two instead of hanging onto it for three years or longer.