Dell launches low-cost ‘netbook’ laptop

Morshad published 05 Sep 2008, 04:30 in main - 359 views

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Dell on Thursday became the latest company to enter the “netbook” market with the launch of a small, stripped-down laptop designed to appeal to customers looking for a low-cost, Internet-ready computer.

The world’s second-biggest personal computer maker said its new Inspiron Mini 9 was geared towards mobile consumers and first-time PC buyers looking for a highly portable machine capable of performing tasks like internet surfing, shopping, and online chat.

The launch comes a few months after Hewlett-Packard, Dell’s biggest rival, entered the market with its own mini-laptop. Asustek Computer, a Taiwanese PC maker, kicked off the market last year with its mini-laptop, the Eee PC.

The move towards smaller, stripped down laptops presents a conundrum for computer makers that have already been struggling with a shift in customer preferences towards lower-cost PCs.

“There has been a big race to the bottom with some of these vendors to see who can sell cheaper,” said Michael Gartenberg, vice president of mobile strategy at Jupiter Media, a market research group.

While the machines’ lower prices should make them appeal to a wider range of customers, their lower average selling prices can also hit margins, making them less profitable than other, higher-end product lines.

As usual, the challenge for PC makers will be to strike the right balance between features and price. Companies have offered small laptops for years but they have only recently reached the point where their price and features might make them competitive with more traditional machines.

Intel, the world’s biggest chipmaker, recently issued a bullish forecast for chips used in netbooks, citing strong demand. The company said it originally believed the low-cost laptops would sell only in emerging markets, had since discovered a strong market in the developed world for families looking for a second, third or fourth machine.

“The challenge of these devices is that they don’t become something that is neither a laptop replacement nor a cell phone,” said Mr Gartenberg. He suggested that the smaller machines could appeal to students, but that their usefulness for business users was likely to be limited.

“For business users, this is not going to be a primary device,” he said. “It could be a secondary computer, particularly for the road warriors.”

Dell said a Windows XP-based version of the Inspiron Mini 9 would be available immediately for $399. A non-Windows model, using an “intuitive Dell-developed custom interface” will sell for $349 when it becomes available in a few weeks.

Dell’s shares dipped 0.7 per cent on Thursday to $20.17. The shares are up 4.7 per cent this year.

Copyright The Financial Times Limited 2008