Medison $150 Laptop. A new way of selling consumer electronics.

Let me just say from the word go that the Medison Laptop has nothing  to do with UMPC hardware. I was reading about the details on Pocket-Lint and reading between the lines, it looks like the cheap price is not actually based on production costs but is offset by offering huge advertising deals on the sales portal. Basically the company selling the laptop expects rather a large amount of visitors because of its appealing price and is offering advertising packages costing up to $2 million on its portal for people wanting to sell PC accessories. [The chance would be a fine thing! – Ed.]

I started to write down the maths involved with calculating the value and it went something like this:

If you get 10 in 100 target customers clicking through to a partner sales site and 1/20th of those buy the product and your advertising slot cost $2 million then if you got 100 million page views during the life of your product, you could sell 0.5 million products. Each sale would cost $4 which isn’t bad if your product brings you $50 in profit. However, 100 million page views is a seriously large number. Lets say that your ad only gets 10 million page views. $40 per sale is cutting it fine. if you drop below 10 million page views, you’ve lost! The whole equation above though relies on Medison selling a minimum of 0.5 million PC’s. And then I gave up trying to go further with the calculation!

I think this sales model is at least, highly risky and potentially, very flawed, especially as notebook penetration already seems to be high and selling 0.5 million of a single  brand of notebook is a challenge. Perhaps Medison are after the kitchens, garages and sofas of the world? If so, why not offer something smaller like the Eee PC? 

Take a look at the product and disprove my calculations! Story via Pocket-Lint