PC showdown: Netbook threat heats up
Computer makers hope that stylish new laptops like Hewlett-Packard's Pavilion dm3 will lure shoppers away from low-cost netbooks. Photo: HP.
There’s going to be a PC retail showdown this holiday season. Let’s call it the netbook vs. the nymph.
In the netbook corner: the cheap, small, underpowered laptops that are all the rage lately. Asian manufacturers like Asus first introduced them, and consumers love them because they handle documents, e-mail, and web surfing for as little as $300. The big PC makers offer their own models, but also secretly hate that netbook fever is sucking the profits out of the industry.
In the nymph corner: a newer class of svelte yet powerful laptops that could steal some attention from netbooks. (The industry calls them “thin and light,” but hey — nymph is more fun.) Like their competition, nymphs are slim — some of them less than an inch thick — and they often eschew extras like DVD drives for the sake of portability. Perhaps best of all, they do a solid job running Microsoft’s eagerly anticipated Windows 7 operating system, which arrives next month.
Today PC heavyweight Hewlett-Packard (HPQ) is the latest to unveil several eye-catching additions to the nymph category, including the Pavilion dm3 at $550 and the Envy 13 at $1700. Both use the latest mobile processors from Intel (INTC) or Advanced Micro Devices (AMD) and deftly handle tasks like 3D gaming and video editing.
What’s at stake here? Just the near-term health of the PC business.
Like most other categories, PCs have had a rough year. Penny-pinching businesses have been slow to spend on technology in a tough economy. Consumers have been shopping mainly for bargains. Meanwhile many global PC makers have cut prices to drum up sales. “The battle for market share is being fought on the price front, which will ultimately hurt the whole industry,” as First Global Research put it in a recent note.
If shoppers continue to bargain shop for netbooks this holiday season — and analysts expect they will — end-of-year growth at companies like HP, Dell (DELL), Intel, and AMD won’t look so hot. For the holiday season, says NPD Group analyst Steve Baker, “unit sales are going to be up big double digit percentages — above teens, I would think. Dollars will be pretty much flat.”
That is, unless the industry can convince consumers to spring for more powerful machines.
Leslie Sobon is trying to do exactly that. Sobon, marketing chief at AMD, has redrawn the sales pitch for computers like HP’s dm3 and Acer’s Aspire 5538, which contain her chips. Rather than emphasize stats like gigahertz, bus speed, dual-core, and the like, the new VISION strategy focuses on telling customers what the PCs can do — an approach that AMD’s research showed is sorely lacking at retail. “We’re focused on entertainment — things like photos, like Blu-ray, Hulu,” she says. “See, share, create.”
Customers are more likely to buy a better-equipped laptop, Sobon’s market research suggests, if they have a clear sense of what they’re getting for the money.
Folks like J.P. Morgan analysts Mark Moskowitz and Anthony Luscri don’t sound too optimistic about how the upsell will go over this year. “With consumers seeming to flock to low-cost netbooks, we do not expect a shift back to standard notebooks to run Windows 7 en masse,” they wrote recently.
Indeed, netbooks are getting more attractive — and more powerful — all the time. Along with the rest of its PC lineup, HP introduced two $400 netbook standouts of its own: the Mini 110 by Studio Tord Boontje, which features a lace-like, three-dimensional look; and the Mini 311, which can handle 1080p high-definition video NVIDIA’s (NVDA) Ion graphics processor.
With products like that hitting the market, there won’t be a huge shift away from netbooks anytime soon — but PC makers will take any upsell they can get.
Look at and realize the future of portability in corrolation to technological advances with p.c.s and smart phones.
HP Envy 13 at $1700
Apple 13" MacBook from $1000.
Apple 13" MacBook Pro from $1200.
And the Windows crowd says Macs are the overly expensive choice?
I thought about getting one, but decided on a MacBook Pro 13" … sure I'm spending more but the resale is there too.
It also has VMWare and XP for those few pesky IE only websites I have to sometimes use… (why would a company force me to use an unsafe web browser?)
Even if Apple put out a netbook it's not for me. Tiny screen, tiny keyboard, no CD/DVD. You have to install from an external CD/DVD drive.
I'll revisit netbooks in 3-4 years.
@Thommy,
Say hi to Junie Browning for us!
The fact of the matter is, Microsoft/PC is the automobile equal of Toyota. Produced for the masses and cornering the market. Apple/Mac is the equal to Honda. More expensive, nicer, and user friendly.
Personally I liked the 69 Chevelle with the 396 motor which is probably the equal of the old IBM Servers running fortran. LOL
Junie Browning haha
Since the consumers love netbooks and carriers are flogging it hard making them more easier on the pocket, mainstream computer companies have no choice but to offer serious attention to the category which they didn't embraced till early this year barring Acer who in their wisdom put their might behind the product. PC industry is not growing in terms of absilute numbers this years, entry level servers are falling way behind clocking a healthy double digit negative growth. The only solace is provided by laptops but their revenue would remain to be a loser because of low ASP courtsey Netbooks.
I'm not impressed at all. These are same old, same old, poor quality and boring designs. I haven't been wowed by anything the Windows world has designed hardware wise ever, excepting for an early mp3 player design by Panasonic. Meanwhile Apple has come out with the nano, iPhone, iTouch, and the Air Book.
Is it that hard to design when you have examples like the Air Book slapping you in the head or are PC manufacturers really so much like the Apple commercials portray them to be?
@Andrew: Most of the people who call IT help lines use PCs, not Macs. Same for those that pay big bucks for techs to wipe their hard drives and reinstall Windows.
I think it's more so that Windows and its multitude of difficult-to-solve troubles (i.e. registry, viruses, malware) has created a generation of people who don't want to waste so much time on things that doesn't deserve it.
The computer manufacturers moved to China and the factories there are capable of producing far more computers than the USA can absorb. Overcapacity. This forces prices down because the manufacturers will not cut production – it's an ego thing to run a factory full-out. The marketing people can't stand to lose market share.
Since the iPhone and iTouch are smaller than these "nymph" computers, perhaps we can call the iPhone and iTouch "nymphette" computers. Ha ha ho ho hee hee.
Let's see, among the meanings for nymph we have the biological term for immature invertebrates – like praying mantis or grasshopper nymphs. Ever seen a tiny ones praying mantis ? Cute as a bug …
http://en.wikipedia.org/wiki/Nymph_(biology)
But this one I really like – the Jungle Nymph – it's an aggressive insect, although not carnivorous.
http://en.wikipedia.org/wiki/Jungle_nymph
Gives new meaning to buggy computers !
Wait, when a computer is stolen, a colloquialism is to say it grew legs and walked off. Getting more logical with the biological every day.
The so-called killer applications do not exist. Gaming companies bet the farm on overpriced gaming consoles and now that market is saturated! Few other laptop(ish) applications exist that are promising, maybe multi-touch screens. You can't upsell a market that is stuck between a price / performance plateau. All they can do is hope the economy turns around and people decide to WANT more than they can afford again. With all the overzealous greed in the world (banking & energy fraud). Mediocrity is in vogue… even in the world of computers and that means fierce competition at unprofitable pricing. You have to give more for less.. even to drop prices for your latest and greatest technology! Sales will pick up, just move on to the next round of quad core laptops for under $500 with multi-touch screens!
Thank you Apple for creating a new generation of people who can't figure out anything about their computers (if you know about your computer, please remain quiet as it should be obvious that I'm not talking about you)!
It's akin to automobiles… few know what's in their car and few know how to fix a problem.
Just search online for the stupid questions that people ask IT help lines and its apparent that it will soon be much worse.
"Um, ma'am, have you pushed that big circle on the front of your computer that's glowing? No? Yes, ma'am, that's your power button…"
Go world…
I think that people like myself, who know what their RAM numbers mean, or clock speed, or know what bus speed is, are dying out. As technology becomes more accessible to people that don't educate themselves on these things, the less they care about "what's under the hood". They care more about the "bells and whistles" so to speak. Bells and whistles being what the computer can actually run as far as programs.
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Sorry, Ms. Sobon, but you may want to re-check your in-tabs. I knew exactly what to expect my netbook to do, and am very pleased at what it can do beyond that. In my opinion, people know the processor and RAM limitations, but it's purpose is clear, and the netbook does it VERY well. I have a full-dress desktop that can do anything I want; the netbook lets me do non processor-intensive tasks and goes anywhere I go, with amazing battery life to boot. That's what netbooks do; if a user wants an optical drive and bigger screen, they can spend a little extra and get a laptop–and the significantly shorter battery life.
It's ridiculous to call Netbooks "…underpowered laptops." Is a motorcycle underpowered because it doesn't have a truck engine? Netbooks are perfect for what they are.