mobile-landscapeOne of the reasons netbooks are so popular is that they generally cost less than fuller featured laptops. But in addition to driving down the average price of computers, netbooks have also led consumers to change the way they think about the value of computers… and that’s led manufacturers to drop the prices of higher end computer as well.

At a recent conference, Creative Strategies president Tim Bajarin gave a presentation on the mobile device landscape. And he suggested that there’s a so-called “netbook effect” on the industry, which will make it difficult, if not impossible, for computer makers to charge $1000 for laptops in the future. 

Now to be fair, I don’t think we’re talking about all laptops here. Some consumers will be willing to pay more for specialty devices like computers with high end graphics and gaming capabilities, or for Macs. But when a $300 netbook can run Windows XP or Windows 7 and most of the applications you need to use every day, it’s hard to justify spending more than $900 on a larger, heavier laptop just because it has a faster processor or larger screen which you may not need. 

Still, Bajarin states what everybody following this industry already knows: Laptop makers are less than happy with the low profit margins on netbooks and are starting to push out higher priced machines with larger screens, faster processors, and other features which could convince consumers to pay $600 to $1000 instead of $200 to $500. 

What do you think? Do you need a faster, more powerful machine? Or if you were looking for a laptop with a larger keyboard and display than the typical netbook, would you rather pay $500 or less and stick with a relatively slow CPU like and Intel Atom or VIA Nano?

You can watch a video of Bajarin’s presentation after the break.

via Asus Eee Hacks

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19 replies on “The Netbook effect: “Laptops over $1000 are basically dead””

  1. In effect, 80% of laptops are clearly on the path to extinction. 20% remaining will be tools for geeks, specialized requirements and those will be built to order. The masses will be happy with the progressively more powerful netbooks, with which they will surf, do their work, and watch short videos. The 20% of people that just can’t live on a netbook, better start writing their case justifying the extra hosepower they need and making detailed ROI studies to prove their point. But they’ll be the exception and they’ll be sorry to have to drag those things around.

  2. Part of the reason I got my Eee 701 was because my main laptop (15.4″) was too heavy to drag around campus all day. However, that doesn’t mean I wouldn’t want my main laptop. I bought it as a desktop replacement and still find occasions when it’s useful to have with me on trips, if not as often as the Eee.

    I do some light image and audio editing, as well as gaming, so a regular-sized and -featured laptop is still useful to me. I bought my laptop at CAD1100 pre-Vista, and today’s cheap laptops are just starting to eclipse it in specs; based on that, and the fact that my laptop still fulfills most of the functions I want from it, I agree that I don’t see a need these days for a laptop above $1000 anymore.

    But I am never, ever, ever getting one as large as 15.4″ next time!

  3. Seems like I’m in the minority, but I want a decked out laptop with 1900×1200 resolution with at least 4GB of ram….AND a netbook.

  4. The gap between the reality of these industry pundits and my reality is amazing. I wonder if they ever actually talk to the people they try to sell these things to….

    I do not need a laptop for work. If I did, my employer would supply it, and I would have no input as to make, model, size, features etc. They would buy a few thousand, pass them out and load it up with so much security it would be functionally unusable….

    I use desktop workstations at work all day, connected to a LAN/WAN nationwide private Intranet as well as the Internet. At home, I have a moderately powerful desktop, customized the way I like it with moderately high graphics capability. I use it mostly for private finance, email, web surfing, light document editing and gaming. I am on a small home LAN, until recently all wired.

    I have owned a couple of laptops in the past, but found them too limiting: in CPU power, with too much weight for easy portability, not enough battery time, and not sufficiently customizable/upgradable. I found the cost way too high for their relative usability. These inadequate laptops cost more than my desktops of much higher capability.

    I hate typing on those smart phones. I have not found a screen that is to my liking either. So I don’t use them.

    I recently got a netbook (ASUS eee PC 1000HE). I have found the 10 inch screen to be quite readable at the distance I view it (approximately 1/2 the distance I view my desktop monitor). I use it in much the same way I use my desktop, except for gaming and finance (I prefer the additional security of wired computing). I added wireless to my LAN for it. However, most of the issues of former laptops are absent now. Easy portability, all day battery life. Insufficient upgrade path, but it cost half of what my desktop did a few years ago.

    We bought a “desktop replacement” laptop for my son for college. He carried to the dorm, installed it and uses it just like his old desktop, just cost twice as much. It’s much too heavy to bring to class. Now we are getting him a netbook for that sort of thing.

    I have relatives and acquaintances who do not own a computer, smart phone, etc. even yet. Some of these are now thinking of diving in because even they see the netbook as reaching their price/usability point.

    So it gripes me to hear people say netbooks are ruining the industry. I say it’s challenging the industry. Those who can’t keep up blame the product and their own customers. Others see an opportunity, and take it.

  5. I think there will be a split between “good enough” Netbooks and more powerful specialty computers for gaming etc… This is pretty much what Atom is about. The specialty computers will probably still sell for a fairly high price, but the mass market will be at netbook-like price points.

    It seems that the workstation market for high end processors is already shrunk down to a few industries ( Look at ), now this phenomenon is reaching the mainstream.

    Some bloggers are even envisaging the possibility of a similar trend developing for operating system:

  6. Apple, Shmapple – I am going to start my own brand: “Grape” – –
    Complete with down-sized, glowing, Logo (a grape colored LED).
    – – – –
    Just trying to make a quantum leap past the Apples vs. Oranges products.
    – – – –
    Comes with a pre-installed copy of Wine.
    – – – –
    Special human-factors type of sensor built-in – –
    Insert your wallet and close the clamshell-like device – –
    When re-opened, will display *your* purchase price –
    My secret?
    Reads/counts number of credit cards in wallet with rfid chips.
    If insufficient cards found, lid locks, and you have to buy machine to get
    your wallet out again – this model comes with Windows-7 pre-installed.

  7. No one will pay over $1000 for a notebook unless they are wanting specialized high end processing and graphics…

    …or a Mac.

    I’m LOL-ing out loud.

  8. I think we’ve hit a plateau, for at least a little while, when it comes to what people really need in computing power.

    Now, I’m talking about the average consumer here. But think about it. XP is fine for most people, and it runs perfectly fine on netbooks. Add in chipsets like ION or maybe even the GN40, and you can run vista.

    Heck, Windows 7 is supposed to use even fewer resources more intelligently than Vista…

    Even on the application front, outside of multimedia and high-end gaming, you can do so much with a netbook(And seriously, how much photoshopping do you want to do with that 10 inch screen?).

    Finally, let’s remember: This is still close to the first generation of these things. The growth in diversity of sepcs and abilities is only just beginning. I look forward to computex with bated breath.

    These machines will only get faster, more efficient, and more varied. The game is forever changed.

  9. If you look at what he is saying though he states manufacturers are trying to sell the bigger/more powerful is good tag line again by moving netbooks up in price by $100-200. He said they are doing this because they are not happy with the margins in netbooks. I really hate this because netbooks are at a great price point now and corporate greed will drive down the netbook value chain by bringing it closer to the profit margin they want.

    However the dropping of the high end exec laptops is great news.

    I hope the newer netbooks are not 20% more expensive and I use my current Samsung NC10 all the time, its great.

    Lets hope Asus, Acer and co will keep prices down

  10. I actually think in the last 10 years people have been buying computer that did more then they needed. The entire concept was to buy something a level or two higher in computing power then most consumers needed. We all should have been buying lowers all along.

    Also, there was only so far that Moore’s Law could have been stretched. It might actually be healthy for the industry to delay the roll out of more powerful technology and so explore the idea of “How do we compute more efficiently?” The idea of computing smarter not faster might actually help innovation down the line because these efficiencies can be use later as the power curve for raw computing power inevitably increases.

    The other concept that industry must embrace is ubiquitous computing. The idea that like a TV or Telephone or electricity that a computer is something EVERYONE should own can own. The entire idea of selling tens of thousands instead of ten of millions of units needed to be embraced by the manufactures. And with that let’s hope that recycling and green techniques are used as well. It is likely easier to make a “Green” computer if that computer runs cooler, runs more efficiently, and is smaller. If computers become ubiquitous we need to insist on making sure we stop filling up our garbage piles with dangerous tech junk. It sad when you see a soda can on the side of a highway…it will be far more tragic when we see a discarded $100 netbook.

  11. Netbooks with 9 inch screens are too small. Ten inch screens are borderline. Twelve inch screens, along with the corresponding bigger and better keyboards, should be fine for 99% of laptop users. The upcoming Samsung netbook with a 12 inch screen is probably the sweet spot and where the entire market will end up in the future.

    I purchased a used Thinkpad X series machine, making my own low end netbook with a 12 inch screen. The underpowered cpu is not a problem for me and the keyboard is great.

  12. Just wondering about netbooks I bought a MSI U100 last October and tried to install every piece of software I use daily. I was very happy that even CAD and 3D software is running fine and as fast as on a PC five years ago.

    Since that day I never touched again my 3 years old ThinkPad.

    I’m allways working with an external monitor (extended screen) and I’m using the single internal one only on a plane or railway. The portability of a netbook is wonderful and exactly what I was wishing all the years back – in that price range.

    So I’m buying more netbooks/-tops for different uses (family, tv replacement) … – multiple PCs instead of one only …

    1. Almost the same for me…. Purchased a netbook a few months ago and came to the realization that I do not need a computer with “mega power”. Rather than spend lots of money on a highly tweaked pc, I am doing the same and plugging up nettops and netbooks for my home users. Multiple PCs are better than one, because nobody has to wait to use a pc.

  13. Netbook shmetbook. Laptops are dead. I just want an external monitor and keyboard miniusb port on my smartphone.

  14. He is right. I wouldn’t pay over 700 Euros for a Notebook even if it would have a better graphic card or an apple on it. 90% of the time you just surf the web and maybe do some office work. When it comes down to video rendering or music editing you have your home desktop which is a lot cheaper to upgrade. As for gaming the ion will revolutionize the mobile gaming for everybody.

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