Cheaper laptops on the way

By Leon Engelbrecht for Gartner
Johannesburg, 31 Jul 2008

Gartner, the ICT research house, says industry's "fixation" with driving down the cost of laptops to $100 (R700) or less is not "a realistic target for the next three years".

The company's analysts say education was the initial target audience for low-cost mini-notebooks, such as Nicholas Negroponte's One Laptop Per Child XO-1 device and Intel's Classmate.

They add that, while both projects aim to deliver a laptop to the market costing less than $100, "all current versions cost notably more than $100 and prices are unlikely to fall significantly during the next two to three years".

Even so, Taiwan's Market Intelligence Centre (MIC) is predicting that 8.02 million low-price mini notebook PCs will be shipped this year. The publicly-funded research house adds that this should balloon 128%, to 18.3 million units, next year.

Priorities

Gartner, meanwhile, warns that while it is important that prices continue to come down, companies that become too focused on breaking that barrier could be distracted from addressing other issues surrounding mini-notebooks.

"The economic benefits of IT literacy in emerging markets are currently driving the push for the $100 PC, but there are many open questions that remain," says Gartner research director Annette Jump.

"These include determining the relevant hardware specifications, power availability, availability and cost of Internet connection, as well as providing adequate finance and payment options for emerging markets where funds may well be extremely limited."

Jump says she believes that increased demand for the devices, along with declining component prices, could potentially reduce prices by 10-15% in the next two to three years; packaging, assembly and software costs are likely to remain the same.

There have been pilot deployments of mini-notebooks in the education sector in a number of emerging markets, including parts of Africa, South America, the Indian subcontinent, the Far East and Eastern Europe.

Early lessons learned from these deployments include the importance of financial provisions beyond hardware; planning and training for teachers and students alike; content development in line with the local school curriculum; the appropriate interface and experience suitable for schoolchildren; and permanent availability of technical support.

Beyond the education sector, mini-notebooks are expanding among consumers, but mini-notebooks business users are also some way off.

Jump believes that, for mini-notebooks to be accepted and succeed in the consumer and business segments, they must be positioned not as a computing device, but as a window into the Internet and a way for people to work, play, learn, record, report and communicate in any way they choose.

"We expect to see increased product innovation in the PC market during the next few years," says Jump.

"Mini-notebooks will create opportunities to reach many buyers across all regions, both in mature markets as additional devices, and in emerging markets as PCs."

Numbers

But vendors may be closer to breaching the $100 floor than that.

The IDG News Service this week reported that the Impulse NPX-9000 is on offer for $130 if bought in units of a 100. The device sports a seven-inch screen and runs Linux. It has a 400MHz processor, 128MB of RAM, 1GB of flash storage and an optional wireless networking dongle. It also features a Web browser and multimedia software.

The IDG says that compares well to the XO-1 that was available at $188 for a short time last year.

The report also notes that "a company called CherryPal introduced a $249 mini-desktop, also running a 400MHz processor, with 256MB of RAM and 4GB of internal flash storage", adding further that, in a recent interview, former OLPC CTO Mary Lou Jepsen said she would bring out a $75 laptop by 2010.

"Now running her own company, Pixel Qi, she cited the falling prices of RAM and components as a way to bring down laptop prices."

The report added that the low-cost laptop industry's poster child remained the Asustek Computer Eee PC that sold 350 000 PCs in its first quarter. The cheapest version has an 800MHz Intel processor, 512M bytes of RAM, 2GB of flash storage and sells for $300.

The MIC adds that world's top three notebook PC vendors - HP, Dell, Acer - are rolling out products for this market segment.

They also note that screen sizes are growing from 7-inch to 8.9- and 10-inch, that vendors are adopting Intel's Atom processor and Microsoft XP as operating systems with Linux as a complimentary option and that keyboard sizes, too, are approaching those of "regular" notebooks.