Laptops' Price Slide Continues

Posted by: Olga Kharif on August 20, 2009

Consumers could long buy tiny laptops called netbooks for under $300. Now, it appears that larger notebooks’ prices are sliding in the same direction as well.

BestBuy is offering a laptop with a 15.6-inch display for $280 — now, in the middle of the summer. In the past, electronics retailers have only offered sweet deals like that on Black Fridays, to lure in buyers.

The trend spells trouble for the PC industry. Thanks to proliferation of netbooks, most consumers already expect to buy their next laptop for less. But, until now, they’ve typically expected to get less computer for that lower price. Netbooks, which come for less than $300, typically come with cramped keyboards and screens of 10 inches or less.

The BestBuy offer changes that. Now, consumers can get a full-sized laptop for under $300. Will that offer pressure laptop prices further? You bet. Everyone from PC makers to components vendors will suffer as the industry’s margins contract.

Reader Comments

Daniel Hays (PRTM)

August 20, 2009 6:11 PM

While no single offer can represent the entire electronics and computing industry, the Best Buy promotion should certainly heighten the attention to a potentially major set of issues. Beyond even just the laptop and netbook space, the continued decline in computer prices is sure to call into question the pricing, positioning, and value proposition of other products ranging from mobile phones and MP3 players to digital cameras and telecvisions.

Most notably, mobile phones, where high-end "smart phones" are quite similar in function to netbooks, will be sure to feel increased pressure. For instance, a savvy consumer would likely question why a new smart phone should be retail priced at $599 when an even more capable (in many dimensions) netbook or laptop could be had for half the price. Sure, you get some degree of premium for compactness and mobile connectivity, but is this worth more than double?

Electronics and computing companies that we work with - ranging from manufacturers of brand name devices to commodity components - are already taking drastic actions to prepare for the challenge of accelerating margin pressures. Nothing remains sacred - isues being addressed range from product development costs to supply chain efficiency to customer service and support approaches.

In this day and age, an end-to-end look at cost competitiveness is going to be a requirement for any manufacturer who wants to stay "in the game." The Best Buy promotion is the latest, but surely not the last, indication.

Steve Wildstrom

August 20, 2009 7:19 PM

It depends on how long Acer is willing to buy market share by selling notebooks at a loss.

HJ

August 20, 2009 7:27 PM

Wow that's really is cheap. Decent sized screen, 2gb ram, 160mb hard drive. I'd definitley buy one is I was in the market for a new laptop.

Commie Stooge

August 20, 2009 9:51 PM

There's an old saying: you get what you pay for!
How big a hard drive does this laptop have? How many USB ports? How fast is the processor?
Does it have Wi-Fi?
Size alone doesn't matter.

DY

August 20, 2009 11:40 PM

Althoug the cheap laptops are great way to open the market for those who can't afford to purchase the standard semi loaded computers at about $1000 net - with constantly changing tech these things wont hold up after a year and in the end the consumer will be stuck upgrading - shute - my $2000 HP tx1000 i purchased 3 years ago can barely keep up with todays tech and ill be forced to upgrade soon -

D

August 20, 2009 11:43 PM

This sounds like a similar price model to video game mnfgrs - sell the hardware at a discount and profit from royalties on software use

RichardT

August 21, 2009 5:31 AM

There is a columnist over at Ziff Davis who thinks we all need to start paying more for computers. Just because margins are too small. And because it funds development. Guess what? Other than gamers, there hasn't been a really killer CPU chomping app in years. That Acer really is all most people need.
How big a harddrive? Twice as much space as I've used in years;
USB ports? A mouse maybe..can always expand;
Fast cpu? For typing?
Wifi? Ethernet? All there. More than I'll probably use even at $280.

Rich Desmond

August 21, 2009 8:27 AM

All of these components and labor are outsourced. The vendors will just move to cheaper fabrication area. All are made overseas so China and India get outsourced to Vietnam and others. Let's see what happens to them under this pressure.

TOM W.

August 21, 2009 11:50 AM

Laptops have been overpriced for years.
They're pretty much "throwaways", due to the fact they start having major hardware issues within 2 to 3 years of use.
If automobiles gave consumers half the problems that laptops do, there would be hearings.

notarichman

August 21, 2009 12:13 PM

i'll wait for the top of the line HP's to come down to what i can afford--almost nothing.

Marco

August 21, 2009 1:44 PM

It would not affect my decision to buy a netbook if laptop prices continue to slide. What these companies don't get is that netbooks are not "less" computer. The portability is essential for travel. Before the age of ultra-cheap netbooks, people were dishing thousands of dollars for 10 inch computers.

There is a solid market for netbooks and not that many people need large computer screens. Today, laptops are the new desktops and netbooks are the new laptops.

Kevin

August 21, 2009 5:41 PM

What I want to know is, when can I get a good Macbook for this price?

Kevin

August 21, 2009 5:42 PM

This would be interesting if I would ever consider another Windows machine, but after 5 Dell machines including 2 Inspiron laptops, what I want to know is, when can I get a good Macbook for this price?

CellPhones

August 23, 2009 10:52 AM

The prices of cell phones continue to hold strong with all the cuts from laptop prices.

It would be interesting to know how much US carriers are paying manufactures for these phones in comparison to prices they charge customers.

Post a comment

 

About

Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

Categories

 

BW Mall - Sponsored Links

Buy a link now!