HP, Dell, Lenovo Offering New Crop of Low-Cost Notebooks - Page 3

While there is potential for these low-cost notebooks, not everyone is sold on the idea. Apple CEO Steve Jobs, whose company has enormous influence on how notebooks are designed and marketed, indicated recently that Apple will not offer one of these laptops any time soon. If users want to access the Web and send e-mails, Jobs said he believes the Apple iPhone is more than adequate.

"The iPhone is a pretty good solution for that, and it fits in your pocket. But we'll wait and see how that nascent market evolves, and we have some pretty good ideas if it does," Jobs said.

Then there is the issue of price.

While lower prices are good for consumers and business buyers, they also mean that companies such as HP and Dell are sacrificing margins to keep shipments high. At the same time, however, these companies have opened up whole new markets with potential new customers.

"There was a lot of speculation about this space just a few months ago and you had a lot of the manufacturers worried about cannibalization and getting into a pricing game, and they were somewhat lukewarm about the opportunity," said Richard Shim, an analyst with IDC.

"I think some of them do remain lukewarm but you can't ignore the aggressive growth that Asus and Acer are experiencing in this segment," Shim added. "I think the bigger players have had a chance to think about it and they don't just want to compete on price. That's why you see these players getting involved but they are trying to formulate a better strategy around their products."

HP is selling the Mini 1000 series for $399 and Dell's Inspiron Mini 9, which came out in September and has an 8.9-inch display that places it squarely in the netbook category, sells for about $350. The updated Lenovo IdeaPad S10e notebook, which is only available through the company's education channels, will sell for between $400 and $500. The first IdeaPad S10, which came out earlier in 2008, sells for about $399 in retail stores.