Netbooks Head for the $200 Range: Good News for Open Source

by Sam Dean - Jan. 14, 2009Comments (11)

At this year's CES show, there was no shortage of netbooks, which have become a surprisingly strong challenge to the whole traditional notebook market.  I remain surprised that more people in the open source community don't herald this trend as extremely positive for Linux, because Linux is making its way onto millions of netbooks and pre-loaded open source applications arrive with them. Now, there are reports coming in that one of the biggest attractions to netbooks--low prices--could get a lot more attractive.

As Christopher Null reports, the netbook market may be headed for some steep price cuts:

"Netbook pricing has been slowly creeping up over the last year as buyers looked for bigger hard drives, better performance, roomier keyboards, and larger screens. That feature creep means it's not uncommon to see prices well above $400 for entry-level devices. The folks at Freescale Semiconductor want to turn that trend around, offering a low-power chip designed to sip electricity while letting netbook makers offer devices for less than $200."

This is a perfect for trend for Linux netbooks to benefit from, since devices can ship with free operating systems and boatloads of free applications. Asus has already confirmed that it has its sights set on a $200 netbook, and that should keep the number of units it is shipping high.

Meanwhile, Asus' CEO also recently confirmed that rumors that buyers of Linux netbooks are returning them en masse are inaccurate. He says that the return rates for Linux and Windows netbooks are about equal. Look for Linux and open source applications to meet up with many new users because of all these trends.

 


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11 Comments
 

I've been looking to get an Acer Aspire One (model U100-432US) for a while now, but the price is still locked at $429.99... I know as soon as I buy one, the price will drop so I've been holding off. Especially with news they are trying to make cheaper models.


The only features that are important to me is the battery and keyboard size. I'm looking for something I can use for most of the day which requires a model with a 6 cell battery basically. I've also heard complaints about the Asus EEE PC keyboard and have heard the Acer Aspire One has a better keyboard. Other than that... hard drive, screen size, and wireless card are pretty meaningless since I plan to use a Linux distro in single user mode to manage my network and program.


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I wonder what this means devices like the Kindle. Given the price point of those, how much better will they need to be to justify buying a Kindle and not just a Netbook?


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@ Jack G: I think we're seeing a convergence between the two device types. Sooner or later you going to see e-ink like displays for netbooks and we're already starting to see tablet form factors for netbooks as well. I wouldn't be at all surprised if Amazon expands their e-book service beyond the Kindle to the netbook market. Most of their revenue does come from the book sales and it would allow them to still draw revenue from the distribution model while freeing them to improve their own reader design (as a Kindle owner even I admit the current design could use some improving). I think you're correct that the dropping price point on netbooks is going to cause some shakeup in the e-reader sector, but I would wager that netbooks would need to start integrating dual-mode screens capable of providing a comparable reading experience and a similar battery life (which I feel are the Kindles strong points).


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But Sam did you go to CES? I went and found exactly one, just one Netbook running Linux on it, and it was a Dell. And they were not even at th show this year..


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For Linux to succeed on netbooks, it needs an app store! This is why, with this idea in mind, we put a new website online last week to fill this gap. It's called allmyapps ( http://www.allmyapps.com ) and aims at helping "normal" user through the process of searching, finding and installing new applications on their system. We are convinced this is a very important brick that was missing for Linux to succeed "mainstream" with netbooks. If you'd like to check it out, we warmly welcome any feedbacks!

Thanks,


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I have a netbook.


It's got a locked down unchangable version of linux, no access to the command line, things like that.


It's a nice , cheap toy. But it is Not Linux , despite all the hype and claims to the contrary.


These "Linux" netbooks are rightly ignored as they are not true Linux.


but they are handy, and I do love mine. :)


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Thibauld, the concept of a central place (app store) to search and install software is hugely beneficial. repositories? yum? apt-get? aptitude? any of these words mean anything to you. Linux distros have been using package management and software repositories for a while.


personA: Look what i just invented!

personB: Oh... Ive seen that before.... its called the wheel.


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At $200 I'd be interested in getting ARM-based netbooks for friends and relatives as gifts. Another bonus would be that an ARM machine is unlikely to be running MS-ware anytime soon.


Hopefully they can come up with some nice designs.


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At $200 I'd be interested in getting ARM-based netbooks for friends and relatives as gifts. Another bonus would be that an ARM machine is unlikely to be running MS-ware anytime soon.


Hopefully they can come up with some nice designs.


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Been saying this for awhile. When ASUS unleashed the netbook craze they expected to sell in the $200 range. Currency fluctuations, component shortages and a product as hot (and as hard to keep on shelves) as the Wii forced to them to reevaluate the market. If they could sell every box they could ship it made sense to target the higher end of the range since it meant more profit. Basic economics. And remember the EEE was a joint venture with Intel so ASUS probably can't go the ARM route for however long that deal lasts.


Vista was not an option on these lower powered machines so Linux had the market to itself. So Microsoft kept XP in the game. If a netbook is selling at around $400 it will probably have Windows on it just like any other computer selling in that range so long as XP is available to sell. Microsoft lowering the price for netbooks only compounded the problem and pushed the price where selling Windows was viable down to around $300.


Now supply of components isn't a problem, the currency rates are better and the economy in in the tank so customers are getting more cost sensitive. Plus all of the me too fab houses in China want in. Add ARM into the equation, promising longer battery life AND cheaper... but no Windows. The world of the $200 netbook isn't going to look anything like the netbooks we saw in '08.


Expect Microsoft to attempt to remain in the game. But fear not, they have no good options longterm.


Option 1. Try to push WinCE on the ARMs. Maybe customers will pick CE with Pocket IE and a Word viewer over Firefox with Flash support and Open Office.org. Maybe. If they succeed they see the Windows marketplace fragmented forever. About the only way to make it work is convince people that CE is Windows and leverage the brand. Customers will see as a notebook running Windows that can't run their Windows apps. That will present some challenges.


Option 2. Do everything in their power to make the ARM netbooks die. Longsoon and the other MIPS options aren't as big a threat as ARM. That means they will have to push an x86 option that is attractive enough that some co-marketing dollars (carrot) and political abuse (stick) can make all of the ARM chipmakers abandon the segment and stick to smart phones. MInd you they see a multi-billion dollar market opening before them. Intel probably can't supply an ultra low power chip in the next couple of years, Atom was their best shot and it ain't good enough to beat ARM. So picking a different winner will earn them the eternal hatred of Intel. More danger.


And both options mean selling a license for a fraction of their current non-netbook OEM pricing. Bad implications flow from that any way you look at it as netbooks make up a larger share of total units shipped. How long will everyone else keep ponying up the usual prices for a license once they figure out that if pushed they will give it away. We are already seeing them giving away Windows to win bids against Linux and OO.o on education accounts. So how much erosion of the haul from their only two real revenue producers can they withstand before the shareholders revolt?


Go look at a five year chart of MSFT and imagine yourself a big pension fund holding a crapload of the stock (and note how big a % of Microsoft is held by pension funds) and reading about them essentially giving their stuff away all over the place to try to hold market share. Everyone reading here undertstands the game, allow customers to see computing without Microsoft and the game is pretty much up. But does some thirty something (i.e. fresh out of college and still knows everything) pension fund manager understand why such desperate measures are essential to survival?


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