
$200 Laptops Break a Business Model - peter123
http://www.nytimes.com/2009/01/26/technology/26spend.html
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ojbyrne
I find this a little misleading, because netbooks are very rarely someone's
sole computer, and they seem to deliberately omit the growing sales of
Macbooks and Macbook Pros (which aren't cheap) to make the story more
convincing.

In fact, I'd say that this is a bit of a microsoft biased story in that the
emphasis is "Microsoft can't compete on price" (which they can frame as "we
don't want to compete on price") when in fact MS is losing at both the top end
and the bottom end of the market.

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c1sc0
I recently got a Lenovo s10 and I'm considering using it as my main
development workstation (hooked up to decent monitor & keyboard, doing mostly
Python stuff) after spending some time traveling with it: I absolutely love
this tiny laptop and I could easily imagine people using it as their sole
machine.

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dhimes
This is exactly what happened to me. I bought a cheap laptop to ensure my mojo
worked in Vista. I made it a dual-boot with fedora to play with linux, and now
it's my main rig.

I only really boot the xp machine so the rest of the household can reach a
printer, when necessary.

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jimbokun
"It is spending a fifth of what it would be for traditional technology, said
Jayshree Ullal, Arista’s chief executive."

[Traditional technology being mostly the standard Microsoft stack, replaced by
various online applications.]

At some point, CEOs of more conservative corporations are going to be
presented with these numbers in a board meeting, and will have a very hard
time defending the value they're getting for the money they're handing over to
Microsoft. True, there's the "we would have to retrain our employees"
argument, but young employees are already used to doing everything online and
will be asking the same questions.

Add to that the downward pressure on margins from netbooks (no one is going to
spend $200 for an OS on a $200 computer), and I do not see any upside for
Microsoft in the near future.

~~~
gaius
_no one is going to spend $200 for an OS on a $200 computer_

You can easily pay $20,000 for software to run on a $200 computer. Whether
that represents value for money or not depends on what you're trying to do.

~~~
jimbokun
Microsoft has been successful largely because the cost of their product was
hidden in the cost of the computers on which it is pre-installed. $200 total
price point does not leave them much room to hide. Because consumers have been
trained not to think of the operating system as a separate cost, but just part
of the computer, I don't think you can convince them now that the operating
system, by itself, is worth as much of the rest of the computer combined.

This is not quite as true for businesses, but even there the cost of site
licenses for the Microsoft product stack needs to be questioned for employees
whose needs are web browsing, email, and basic document editing. And, of
course, the article shows that newer companies are coming to that conclusion
already.

~~~
Retric
Vista Home costs dell ~40$.

~~~
jimbokun
1\. Did Microsoft charge more than that before Dell started seriously
supporting Linux on their computers? (Honest question, I don't know the
answer.)

2\. $40 is a big cost to absorb when you are selling a $200 or $300 netbook.

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babul
No sign-up version...

[http://www.iht.com/articles/2009/01/26/technology/26spend.ph...](http://www.iht.com/articles/2009/01/26/technology/26spend.php)

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indiejade
Maybe some people are missing the point of the article: hardware is cheap,
getting cheaper: Moore's Law in action.

Software only becomes expensive when it is based upon this intangible notion
of "sales," a per-unit figure that becomes largely irrelevant when factoring
in dollars spent on marketing and advertising, licensing fees and things of
that sort.

OSS has the unique ability to put both categories in somewhat of a corner. Not
really intentionally, either; simply by being honest.

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c1sc0
This is a great time to set up a business that helps small to medium
businesses shave some of the IT costs; that's exactly what I am trying to do
as a side-project. So not all is black and gloomy in this depression.

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kwamenum86
Cheap alternatives that eat into revenue generated from their more expensive
counterparts are not really business model busters. They just compete better
using the same business model in this economy.

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jrockway
I noticed the article started out by talking about Asus' EEE PC, but then went
on to talk about how Acer is stealing Apple's market position. Is this a typo?
I know Acer still exists, but I'm pretty sure Asus still sells the most
netbooks.

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hs
couple years ago netbook was luxury

asus makes luxury into commodity

the price of netbooks should drop (esp over last 2 yrs) but didn't, suggesting
there's a lot of demands

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rokhayakebe
In parallel, economic downturn means more innovation as individuals and
companies get very creative to meet the changing expectations from consumers.
When resources are scarce, thinking becomes abundant. This is the same reason
why poor and hungry startups are always more innovative then large and stable
companies.

