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Join Date: Mar 2009
Location: United States
10-15-2009, 03:46 AM
And this is why I worry that the price of netbooks will slightly increase (maybe only $50). Instead of companies losing soo much because of lower notebook sales... they would gain a little of that back from increased netbook sales.
The demand is high... and it is cutting into other sales and sort of cannibalizing the product line. I can see Dell and other companies slightly bumping the price of the netbooks to recompensate
But that is all speculation.
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Join Date: Oct 2009
10-15-2009, 05:14 AM
And 3 days later become annoyed that it is so slow.
And its not just grandparents. Its your mother and mine. And that housewife that doesnt do very well on the computer. Its the non comp-sci college or high school guy who gets a linux netbook only to find out they cant do any of thier assignments with it.
That generates returns, correct or not, smart or not, "right" or not.
Someone (i forget who now) was once interviewed and asked if he wanted to compete with facebook. He said facebook is very good at making very little money fast. He said "its not a business I want to be in".
Its like that with dell. Hell, its like that with car manufacturers now. People are buying small computers and small cars. The assembly lines were not costed out based on small computers with small profit margins. They were costed out on trucks that could support union wages and excess labor. They were modelled on demand based buying.
Its the same thing here. Sure, you can make a profit selling bazillions of netbooks on the market. And Dell doesnt want to lose these netbook sales to the other guys, potentially giving HP or Acer or whoever a foothold to go after other sales within a family on higher margin needs.
At the same time every netbook sale is a laptop potentially going by the wayside. And when you are Michael dell, that is challenging enough that you do away with the 12" netbook that competed with your 13" laptop offerings and the 9" netbook which was more limited to produce as a future focused platform.
(You net cost savings on building off of one chassis. Think of the 9, 10, and 12 as market entries, loss leaders to figure out what the sweet spot is. Sales of the 10 were strongest and in the time that all three models were on the market, your engineers figure out that the size of the 9 makes it hard to put standardized hardware in there. Everything is an expensive R&D hassle. But with the 10 and 12, you can use standardized parts which has a broader margin and lowers your cost. If you dump the 12 to avoid competing with your own products, that leaves the 10, which is where we are today.)
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Join Date: Aug 2009
Location: United States of Australia
10-15-2009, 07:46 AM
Thanks for a detailed and well thought out post, Clocks.
I don't agree with the grandfather scenario though. I think the fact that so many people have discovered that they can work perfectly well on low-spec hardware is more of an issue for the hardware manufacturers (not to mention retailers) than the fewer people who decide it's inadequate.
The margins are bigger on a $1500 laptop than on a $300 netbook. But most people who buy a netbook today get a computer as capable, or more, as the computer they used 4 years ago. But what they do on their computer hasn't changed, and therefore the lower spec, low margin option does work for them.
bmcclure, you can rest easy. The only way the hardware manufacturers could simultaneously raise prices would be if there was a perfect monopoly or perfect collusion (illegally so). It's not going to happen. The market is pretty competitive, and China is really starting to shine. They're bringing out netbooks and notebooks of very decent quality, and the increase in quality continues at a rapid clip. I can't see how the hardware manufacturers could raise their low-end prices, even if they want to.
Join Date: Nov 2008
Location: New Hampshire
10-15-2009, 02:16 PM
I found that Dell actually said something a lot closer to what I suspected:
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