There’s no doubt that the low-cost netbook trend will affect pro-mobile sales. It’s likely to affect laptop sales too. People in the industry are already hinting to me that they have problems. OEMS can’t price and position pro-mobile devices with confidence and specialist resellers have problems choosing which devices to stock. They don’t want to be left with a shelf full of out-of-fashion netbooks. There are still a few areas where netbooks can’t compete with UMPCs; built-in 3G, size and weight advantages, touchscreens, alternative form factors and rugged builds which can drive some good high-margin sales but when a well known brand comes along and offers a device with reasonable mobility advantages, a known quality-level, huge battery life, built-in 3G and a great price, you have to wonder how customers, OEMs and resellers in the mobile PC market will respond. [More of my thoughts about netbooks causing industry problems in this article.]
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The T-Mobile / ASUS Eee PC 901Go is the device that’s constantly in my head now as I look at MIDs and pro-mobile PCs now. It’s a product that has moved from the consumer netbook area right into pro-mobile territory by offering a relatively small size an weight, great battery life and offering mobile Internet connectivity built-in. If it was pro-mobile priced you’d think twice, but it’s not. The ASUS 901Go is going to be offered for free with a 10GB / 25 Euro per month data contract; on one of the best country-wide 3.5G networks in the world! It’s almost a no-brainer in a market where MID products are delayed, smartphones are getting better and there are limited numbers of good-quality, pro-mobile choices. Upgrade to Windows XP on the 901Go and you’ve arguably got the dream ultra mobile PC that many of us talked about 2 years ago. Cheap, 1KG-class, keyboard, SSD, good screen, 3G and available. Back then, you would have been looking at $2K+contract for this and now it’s FREE!
Exklusiv bei T-Mobile erhalten Sie in Kürze den "bislang besten Eee PC"
(vgl. deutsche Testberichte) um sagenhafte 0 Euro inklusive eines
Datenvolumens von 10 GB pro Monat um nur € 25,- pro Monat. [Source. Via.]
In this early-stage MID and mobile computing market that’s also affect by some economic instability this device gives much of what’s needed while saving significant amounts of money and allowing people to wait to see how the MID and ultra mobile PC markets pan out. Businesses will be able to reduce capital outlay by switching over to the 901Go. Consumers can jump on the mobile Internet wagon at zero-cost and those waiting for a MID can save money simply by carrying a slightly larger bag for another 2 years! Why chase the perfect mobile device strategy in the early part of the market when you could literally save hundreds and hundreds of Euros by making a few sacrifices, wandering down to the local T-Mobile shop and signing up for a 901Go?
The 901Go is now in the database
How are OEMs supposed to react? If you’re pushing a consumer-focused mobile PC product into an unstable market (I’m thinking about WiBrain, Raon Digital, Viliv, Archos, OQO, Flybook and others here) and you need to sell 20,000 units at $700 RRP just to break-even, you’re left with the choice of making your product a loss-leader for your brand (if you’re a risk-taker, confident that the device is a high-quality item and that you’ve got enough money to be around to make money in a more stable economy in the future) or pulling-out completely. OEMs How do you see yourself competing against a 901Go? How can resellers compete with carriers?
The price of the EeePC 901Go might be great for consumers and offer a good money-saving alternative to their ideal device but it, and the other netbooks that are bound to follow into the 1KG-class market really could be a killer for many in the pro-mobile industry unless they take risks and drop prices now.
Note: The T-Mobile that I’m referring to here is T-Mobile in Germany (The parent company of T-Mobile USA.) T-Mobile USA are not carrying this device as far as I know.
Great article!
To me the answer is “Cant beat em, join em.” There are many more carriers out there who will need to compete with T-mobile. Verizon could carry a Dell type Go and ATT an HP. Also more form factors would be nice. Couldnt T-Mobile carry a line of these in different form factors?
The carriers carry an entire line of phones, why not an entire line of UMPCs, all subsidised and covering a spectrum of form factors. I cant wait!
This has been talked about before. What will the industry do next as these bottom feeders show up from China with dirt cheap Linux compatible devices? If they do 3G, hey that changes the game then too! Nokia is in a place where they can move their 810 line up to being a netbook someday and have a respectable device (that could cost more with cell phone features built-in AT THEIR LOWER COST)!
Chip wise – when the lower priced ARM and MIPS players in this game has their stuff fully friendly with Linux, Flash, etc, with it all working ok – then, due to the cost drop in the “basic component costs” (also note that Pixel Qi is saying that their screens will be much cheaper to make and sell vs the current LCD technology, so the addition of that feature set might also see lower netbook and other device cost)… the fur will really start to fly then?
Well, when we add it all up… we will maybe see netbooks being sold wrapped in solid plastic, and hung from a peg in the wall sold in Dollar Stores or at you local drug store (like today’s CD players are sold). If these devices are priced at below $100 (we already seen one claiming to be priced for $98.00) well these devices will be priced where they are almost throw away class products!
That will indeed be a change. There is nothing that the market can do about it as the 1st rounds of ARM and MIPS systems are hitting the market now. Once they have the rough edges removed and meet the mobile user’s basic needs. Well, where are the profit margins then? The companies selling these NEED to have a full list of “option” add-on USB devices to add to these sales (like external storage, external DVD/CD burners, external advanced sound systems, 3G web service add-ons, etc. There will be a way to make money for those positioned to do it.
…The razor and razor blade sales model. Sell the basic devices at a loss and then make profits on the accessories!
That’s basically whats happening with the carriers. They sell the device at zero cost to make monthly on data plans and get customer on their books for further advertising and offers. The difference with the carriers is that they are worse than bubble-pack sales as they have the volume and sales process to be able offer the latest products in a 12-18month cycle.
This makes it even harder for specialist resellers!
S.
Exactly what Walmart and big chains stores do. They sell the same product that the specialist reseller does, only for far less as the volumes they push are very high (and they don’t depend on that product to be the only thing that they sell).
If they have left over product, because of the high volume that they can sell, then they FORCE the manufacturer to take back what they don’t sell. With the numbers they can push, the manufacturer will make this deal just to get the product on the big chain store shelves.
The specialist has to sell SERVICES and SUPPORT, and add-ons. If I were in the specialist market I would look at doing LinuxMCE as a product that could be “controlled and interfaced with” a netbook or UMPC. If you have not seen the video on LinuxMCE, then google it and the video will be in the first 4 or 5 in the list that google gives you.
A UMPC, Cell Phone, or Netbook would multi-task on the sofa or arm chair, while browsing, doing email, at the same time could be used as a “control device” for LinuxMCE… and with 3G (to use netbook, UMPC, or cell phone as remote security notification device as LinuxMCE has a home or business security feature built-in so see the video as to how it is done), well there seems to be no limit to the different options that LinuxMCE has today, and because geeks are building it, you can email them with additional feature requests (or do it yourself as the software is GPL based software).
Specialist retail stores need to focus on the entire package.
I know one specialist store that does computers (ASUS shop) that refused to even handle the EeePC due to not being able to afford doing RMA support based on the margins that they could see on what little volume they could project doing (they did business desktops and servers mostly). They didn’t even want EeePC in the house at all to distract them.
Great Articule!!!!
Question: 901 without Wifi n?
Thanks
Without draft n and without Bluetooth.
Steve.
The netbook trent to me will clearly result in the Taiwanese OEM makers taking a significant chunk of market from the traditional Japanese (and to some extend, Dell and HP) laptop market shares.
Calling a netbook botton feeder is stupid. Why, Atom is not fast enough? I run 20 large-photo panorama stitch on my netbook. The new Macbooks are out and all I can see is the 4.5 lb figure. Too heavy. It’s not about the price.
Hi.
It seems that in Italy this will be available end october, both as an alone package and as a contract based purchase (100 hours per month).
No price right now, even if they say the price should be lower than 400 euro.
c
Unless the telcoms go one step further and offer you a choice, I guess this is where the “specialist resellers” come in:
Models beyond the most basic ones. And as it already works in the phone market, they could bundle the sale of an “upscale” UMPC / Netbook with a mobile contract to reduce the price.
Dear,
it seems the 901Go and (new?) 1000HGo will be soon available in Italy at 399 euro:
http://www.tim.it/consumer/c365/i3329/o76476/prodotto.do
and 479 euro:
http://www.tim.it/consumer/c365/i3329/o76670/prodotto.do
respectively both with HSUPA.
FC
While the netbook segment might well appear to be causing problems, I would suggest that the situation is somewhat the opposite:
In a declining economy – and rest assured that the marked analysts where not taken by surprise, the decline was well evident over a year and a half ago – with a marked that has been saturated with electronics during the last couple of years, a product like the netbook would be a natural attempt at keeping sales up. For example, a significant part of Asus’ revenue actually stems from the netbook market – a marked that dates not even a year back.
It would furthermore be wrong to assume that margins are low on these machines. It is more of a reinvention of a market that has been very much driven by the top range products. This cannot be expected to continue during an economical decline, and while it probably will partially slow down development, it is also likely to reangle the development efforts towards a new type of products.
I think that the reason is simple: Asus saw something that we all had been wanting for a while, when they released the 701: A small cheap laptop without the performance but with the functionality. For some reason, the hierarchy used to be completely one dimensional – more functionality meant higher performance and higher prices. We are seeing that paradigm being overthrown, with really cheap full sized laptops with 3G-connectivity.
No, this is the best thing that could have happened to a market where marked strategy was more important than what consumers really wanted. The netbook marked stands for the opposite – you have to listed if you are just going to include the most important things into a product.
I searched for ‘Cellular Phone Accessories’ at google and found this your post (‘e 901Go is A Killer device. (This is not a review) | UMPCPortal – The Mobile Internet and Computing Reference Site’) in search results. Not very relevant result, but still interesting to read.
Same as the new AT&T Microcell but it has only the details. It will come soon. Interesting thing is its support 3G.