Mini-notebooks are growing in popularity, but won't drop below $100 in the next three years

Gartner analysts have indicated the $100 laptop is not a realistic target over the next two or three years.  Companies are designing the $100 laptops mainly for schools in developing nations, but the finished products routinely cost significantly more than $100.

“The economic benefits of IT literacy in emerging markets are currently driving the push for the $100 PC but there are many open questions that remain,” said Gartner research director Annette Jump.  “These include determining the relevant hardware specifications, power availability, availability and cost of Internet connection, as well as providing adequate finance and payment options for emerging markets where funds may well be extremely limited.”

Growing demand and lower hardware prices will help drop the prices 10 to 15 percent over the next few years, but packaging, assembly and software costs are not likely to drop.

Companies focused solely on the $100 price mark have to also take into consideration infrastructure needs of the developing nations, including power grids and Internet networks.

The One Laptop Per Child (OLPC) foundation was the first group to publicly aim for $100 for its low-cost notebooks.  Its first XO laptop was released last year for $188, and OLPC said it plans to release the second generation XO for somewhere in the $75 price range, if possible.

A Taipei-based company called Carapelli has unveiled a new $130 laptop, the NPX-9000, which has a 7-in. screen, 400MHz processor, 128MB RAM, 1GB flash storage and wireless Internet.  But while it's a lower priced laptop compared to other competing products, it must be ordered in lots of at least 100.

The low-price laptops have not made a big splash in the corporate world, because of the lack of security features and other basic tools needed in the workspace.  But the consumer and education markets have seen significant growth and interest in the mini-notebooks, especially as the technology used in them continues to advance.

In the future, vendors need to begin to market low-cost laptops as "windows into the internet," rather than a laptop for businesspeople to work with.  The smaller and more compact keyboards also make it harder for adults to type longer documents on them, and instead should be used "for people to work, play, learn, record, report and communicate in any way they choose."  

“We expect to see increased product innovation in the PC market during the next few years,” said Ms. Jump. “Mini-notebooks will create opportunities to reach many buyers across all regions, both in mature markets as additional devices, and in emerging markets as PCs.”

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