The personal computer industry is poised to sell tens of millions of
small, energy-efficient Internet-centric devices. Curiously, some of
the biggest companies in the business consider this bad news.
In a tale of sales success breeding resentment, computer companies
are wary of the new breed of computers because their low price could
threaten PC makers’ already thin profit margins.
The new
computers, often called netbooks, have scant onboard memory. They use
energy-sipping computer chips. They are intended largely for surfing
Web sites and checking e-mail. The price is small too, with some
selling for as little as $300.
The companies that pioneered the category were small too, like Asus and Everex, both of Taiwan.
Despite their wariness of these slim machines, Dell and Acer, two of the biggest PC manufacturers, are not about to let the upstarts have this market to themselves. Hewlett-Packard,
the world’s biggest PC maker, recently sidled into the market with a
hybrid of a notebook and netbook that it calls the Mini-Note.
Several
makers are taking the low-powered PCs one step further. In the coming
months, they are expected to introduce “net-tops,” low-cost versions of
desktop computers intended for Internet access.
A Silicon Valley
start-up called CherryPal says it will challenge the idea that big
onboard power is required to allow basic computing functions in the
Internet age. On Monday it plans to introduce a $240 desktop PC that is
the size of a paperback and uses two watts of power compared with the
100 watts of some desktops.
It wants to take advantage of the
trend toward “cloud computing,” in which data is managed and stored in
distant servers, not on the actual machine.
Industry analysts say that the emergence of this new class of low-cost, cloud-centric machines could threaten titans like Microsoft and Intel,
or even H.P. and Dell, because the giants have built their companies on
the notion that consumers want more power and functions built into
their next computer.
Some of the big computer companies put a
positive spin on the low-cost machines, saying they welcome new
categories. But they would just as soon this niche did not take off,
given the relatively low profit margins.
“When I talk to PC
vendors, the No. 1 question I get is, how do I compete with these
netbooks when what we really want to do is sell PCs that cost a lot
more money?” said J. P. Gownder, an analyst with Forrester Research.
Even
as some PC vendors are jumping into the fray, others say they are
resisting. Fujitsu, one of the world’s top 10 personal computer makers,
said that it believes the low-cost netbook trend is a dangerous one for
the bottom line.
“We’re sitting on the sidelines not because
we’re lazy. We’re sitting on the sidelines because even if this
category takes off, and we get our piece of the pie, it doesn’t add
up,” said Paul Moore, senior director of mobile product management for
Fujitsu. “It’s a product that essentially has no margin.”
Stan
Glasgow, chief executive of Sony Electronics, said, “We are not looking
at competing with Asus.” But he said the company is investigating what
consumers want in a second PC.
It is a market that caught the
major computer companies — both hardware and software — by surprise
after Asus, entered the market last year with the $300 Eee PC. The
company thought the device would essentially appeal to the education
market, or as a starter laptop for adolescents, but the interest has
turned out to be broader.
With an emphasis not in on-board applications (like word processing), but Internet-based ones like Google
Docs, the Linux-based Eee PC sold out its 350,000 global inventory. It
has been in short supply ever since, said Jackie Hsu, president of the
American division of Asus. Everex has sold around 20,000 of its
CloudBook, which sells for about $350.
The sales are a veritable
drop in the bucket compared with the 271 million desktop and laptop PCs
shipped globally last year. But there is an intensifying debate about
how big the category can become, and what segment of the market finds
these computers appealing.
IDC, a market research firm, is
predicting that the category could grow from fewer than 500,000 in 2007
to nine million in 2012 as the market for second computers expands in
developed economies.
Intel is projecting that by 2011, the
market for the netbooks will be 40 million units a year, which is why
Intel is jumping in with low-powered chips that would be used in the
netbooks and the net-tops.
via .nytimes
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