Netbook Halo effect

Windows 7 to usher in crush of cheap laptops

Call it the Netbook halo effect: small and cheap is infectious. A quick peek at the lineups of new laptops slated for the Windows 7 (October 22) roll-out make it clear that the prices of mainstream and higher-end laptops are diving, even as the technology gets better.

"There's a new reality in laptop pricing," said Bob O'Donnell, an analyst at market-researcher IDC. "It's getting harder and harder to sell anything over $800." O'Donnell cited a data point that showed the average selling price of notebooks falling below desktops briefly in retail. "That may have been an anomaly, but the fact that's it's even close is indicative of this phenomenon."

That said, let's start with HP, the world's largest PC supplier. Svelte, well-built business laptops have historically been priced at a premium--starting at more than $1,000. Not anymore. On October 22, HP will begin selling the 13-inch ProBook 5310m that is about 0.9 inches thin, less than four pounds, and clad in an aluminum display enclosure and a magnesium alloy bottom case for $699.

HP ProBook 5310m starts at $699: this class of business laptop used to start at more than $1,000.

HP ProBook 5310m starts at $699: this class of business laptop used to start at well over $1,000

(Credit: Hewlett-Packard

That's about $800 less than the HP EliteBook 2530p business notebook series introduced in August of last year (that started at about $1,500). The 5310m is priced at $699 with an Intel Celeron dual-core processor and $899 with Intel Core 2 Duo chip. Both come with the Windows 7 operating system.

That's what I call a sea change in pricing.

But it gets better. Then there's the 4-pound HP Pavilion dm3 notebook that starts at $549 (no, it's not a Netbook) and will likely range up to about $700 in price for a reasonable memory and hard drive configuration. The 13-inch laptop comes with power-efficient Intel Core 2 Duo or AMD Neo dual-core processors and a standard 6-cell battery that delivers--so HP claims--up to 10 hours of battery life.

I was able to play with a dm3 at a function sponsored by Advanced Micro Devices recently in San Francisco. My immediate impression was that this was a light but solid design.

The Apple $999 MacBook is suddenly starting to look pretty pricey and a little on the thick and heavy side. (Though, according to reports, this may be about to change.)

Let's move on to Toshiba (speaking of sea changes). Toshiba has been known (along with Sony) for offering impressive but stratospherically priced ultraportable laptops. One of the most egregious examples is the 12-inch Portege R600, which starts at $2,099 and jumps quickly (by adding a solid-state drive) to more than $3,000.

That price almost seems laughable these days. Yes, the R600 comes with an integrated optical drive, powerful Core 2 Duo processors, and some other bells and whistles, but that will be an increasingly tough sell against Toshiba's new Satellite T100 Series that is also small, light, and relatively powerful but lops about $1,500 off the price of the cheapest R600.

Toshiba Portege R600--$2,000-plus executive laptops: an endangered species?

Toshiba Portege R600--$2,000-plus executive laptops: an endangered species?

(Credit: Toshiba

To wit: the 11.6-inch Satellite T115 starts at $449, packs a dual-core Pentium SU4100 processor, claims up to nine hours of battery life, and weighs only 3.5 pounds. That makes the R600 and other "executive jewelry"--as Intel's CEO Paul Otellini likes to call these laptops--history. And the T115 may even give Toshiba Netbooks a run for their money. (Why settle for a single-core Netbook when you can get a dual-core laptop for $100 more.)

Dell, oddly, is going in both price directions. First, let's look at the Dell we know: a purveyor of inexpensive laptops such as the $449 Inspiron 14 replete with a 14-inch screen, dual-core Pentium, optical drive, 2GB of memory, and a 160GB hard disk drive.

And Dell has plenty of other inexpensive configurations, lending its considerable weight to the downward price pressure on laptops.

Then there's the Dell few people know. The reborn merchandiser of pricey executive laptops like the impressively sleek $2,299 Adamo or the equally stunning Latitude Z starting at $1,800. And then there's the ultra, ultra-thin Adamo concept. This certainly will not be cheap either (if it, in fact, appears).

Time will only tell how well this Beverly Hills boutique strategy holds up in the face of an onslaught of thin, attractive, and cheap laptops. Of course, there will always be room for a few Cadillac XLR-V roadsters and Ferraris at the top if the designs are compelling enough. (To be honest, I'm anxious to see how groundbreaking the new Adamo design is.)

Meanwhile, the future of laptops lies somewhere below $800. I can live with that.

By Brook Crothers

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