The Future of Subnotebook Pricing

Corpuscavernosa recommends a story from InternetNews about the development of the subnotebook market. The author notes the beginnings of a trend toward selling the devices bundled with certain services rather than as standalone products. He notes two examples; a free Asus Eee PC with a broadband package, and another for opening a bank account. Quoting: "Soon, the market will be overwhelmed by what I like to call 'mini me too' laptops -- commodity Asus clones that will drive margins for all players toward zero. There will be no real money to be made in direct sales of cheap mini-notebooks to consumers. I'm predicting that the successful pricing model for 'mini me too' laptops will look nothing like the notebook pricing model (where you always pay full price for the hardware), and a lot like the cell phone pricing model where you buy a service, and the hardware is heavily subsidized or given away free."

Comments

like cell phones...

[Anonymous Coward]

and like cell phones, americans will all be tight arses and opt only for the free/subsidized notebooks, and yet wonder why their notebooks seem to be intentionally crippled, while europeans buy theirs outright and have everything work as it should

Calculator Redux?

[MSTCrow5429]

I've read that in the 70s, 4-function calculators went from high-margin, luxury items to throw-away promotional items. The only calculators I've bought are a financial calculator, and a scientific calculator for basic statistics; all of my other calculators are freebies. It took a bit longer, perhaps as the product is far more complex, but are we seeing the same ultra-commoditization of mobile computing devices?

Re:Subnotebooks like Cell phone plans?

[KokorHekkus]

Just grabbed one of the many junkmail papers i find in my IRL mailbox here in Sweden: If you sign up for a 24 month plan on mobile 3G broadband (at $70 a month) you get a Toshiba 15" laptop with 3 GB memory, Athlon X2 and 250 GB hd for $170. For some people that kind of offer makes sense, for others not. But this is just one of several offers that I find in my mail every month. And you bet the buyers will pay the monthly fee, one way or another. Just like with cellphones.

Why there are no economist billionaires.

[Hankapobe]

...sellers make zero economic profit. Economic profit is the profit above the profit you could make in another industry - so, if you build a computer business with 100,000 and get a 20,000 profit and that 100,000 would only have gotten you a 5,000 profit in the pizza business, that 15,000 difference is the economic profit).

This is why I wanted to slap my econ teacher in B-school around.

There are no billionaire economists - but they know it all, don't they? And yet, an uneducated man from Arkansas became one on the richest men in the World from making zero economic profit: Sam Walton founder of Walmart.

Re:Why there are no economist billionaires.

[Anonymous Coward]

It's because economists like to call their field a science, when in fact it is only a science if you consider fortune telling a science. Economics is bullshit. Otherwise, we wouldn't have to switch between dominant economic theories every few decades when something bad happens that the previous theory failed to take into account. For instance, where is stagflation mentioned in any economic theory prior to 1975? Oh right, it was considered impossible.

Yo! Asus! Listen up!

[Anonymous Coward]

Asus's success is killing it. If you've been to their website, it is slow as a pig, 24x7.

Part of it is due to a clueless webdesigner, who loaded it up with flash, javascript and all sorts of other crap. Add to that a big rise in people visiting, and suddenly their servers are dog slow (at best) and down (too often).

In fact, it's a classic example of what not to do with web design and IT planning.

So, Asus, could you PLEASE put some bright people on this, and give them the resources they need?

At to the bright people: could you PLEASE not make having Javascript and Flash mandatory? Not all of us are smoking the Web 2.0 crack.

Thanks.

Repeat

[kurtis25]

Didn't they try this with desktop computers. When my sister went to college dad got dial up internet from MSN which came with a free computer which dad gave to her. It only makes sense to give away computers to use internet, especially now that companies are inserting ads. If my ISP stands to make money off of each PC on the network then the more PCs I have the better off they are. If you gave me a free subcompact-notebook, I would surf the internet more because I would be portable within my house.

Re:I'm not sure the author understands economics

[Anonymous Coward]

Yeah, but the mods here are wowed by half-forgotten arguments from freshman economics class, even if they are largely irrelevant.

BTW vendors that have established strong brand names, including HP, Sony, Lenovo, Dell, and Gateway, have a strong point of differentiation from the "no-name" vendors and so are arguably not playing in a commodity market. The brand-name vendors are in a "several vendors" market, which should allow at least some of them to make profits above the money market rate of return, assuming they are well-managed.

Re:AMD geode

[Alwin Henseler]

(..) then why did things like the AMD geode or the recent (forgetting the name) $20/month balck box computer catch fire? Got more info on that? In the case of the AMD Geode, I think you're mistaken. I've got one of these (Geode NX1750) lying around somewhere, and it's one of the coolest running chips you can find in a desktop (more likely found in industrial board, media player/set-top boxes or similar). Performs like an Athlon XP1600+, uses 25W tops (around 14W average). If you manage to overheat that, perhaps it'll smoke a bit, maybe crack, but not burn. CPU sockets surely use some flame-retardant material, and a metal CPU cooler doesn't help either to start a fire.

Me thinks you're talking about some machine with a Geode *in it* (maybe powersupply burnout), or perhaps a laptop battery catching fire?