Image: HP 2133 Mini-Note PC
HP
HP's 2133 Mini-Note PC, which it dubs the "HP Mini," starts at $499 and has an 8.9-inch screen with a 4-gigabyte hard drive. The company, which released the computer in April, says it was originally intended for the education market, but is finding appeal in the United States among consumers who want a second, or even third computer, just for Internet and e-mail use when they're out and about.
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msnbc.com
updated 7/17/2008 9:01:13 AM ET 2008-07-17T13:01:13

They’re known by several different names: Ultramobile PCs, ultralow-cost PCs, low-cost ultraportable PCs, ultra-low power PCs and netbooks, among them.

No matter their title, this segment of lightweight, compact and relatively inexpensive laptops represents a small, but growing, number of PCs that is appealing to American consumers, as well as to those in countries like China, India and Japan, once thought to be the primary market for such devices.

Last fall, a Taiwanese company called Asustek came out with a 2-pound, $299 laptop with a 7-inch screen, 4-gigabyte solid-state drive and a cute name, the “Asus Eee PC.” It became a holiday hit, selling several hundred thousand of the devices at Amazon.com alone.

Until then, the types of low-cost, little notebooks in that price range were largely associated with programs like One Laptop Per Child, which seek to bring inexpensive laptops to children in developing countries.

In the United States, “for the most part, the appeal has been to gadget people buying a new toy or adults who are looking for a secondary notebook” in the 2- to 3-pound range for Internet and e-mail use, said Bob O’Donnell, vice president of IDC technology research firm.

“It’s more for people who say, ‘I want to have something smaller and lighter that I can carry with me more often than my 6-pound, 15-inch notebook,’ ” he said.

Leading PC makers HP, Dell and Acer, as well as others, are jumping into the market to get a piece of it, and chipmaker Intel is heavily pushing its small, low-power Atom processor for the new notebooks.

Image: Acer Aspire one notebook
Acer's new Aspire one line of low-cost, low-power notebooks can fit "snugly in a backpack or tote bag," the company says.

The devices are better at handling “lite” or Web-based versions of software programs, such as productivity suites, that don’t require as much room or speed on the PC as their bigger, more powerful software siblings.

The computers generally run on the Linux or Microsoft Windows operating system. (Msnbc.com is a Microsoft-NBC Universal joint venture.) They generally don’t come with a full-size keyboard or a built-in DVD or CD drive. Most have Wi-Fi for almost-anywhere Web surfing.

Portability, gender and price
To a large degree, their appeal comes from their portability, being able to be easily placed in a backpack or even a large purse.

“There is sort of a gender story here,” said O’Donnell. “Women with smaller hands looking for a lighter device are seemingly more interested in this kind of notebook than men. Many men’s hands are larger, and the keyboards on these are difficult for them to work with. For them, they’ll likely still opt for a lighter notebook, but a bigger one.”

The $299 price point that drew attention and buyers to the ultramobile market is no more, although versions of the original EEE can be found online in the $300-plus price range.

Among Asus’ latest Eee offerings is the 2.4-pound PC 901, with an 8.9-inch screen and a 20-gigabyte solid-state disk drive. It retails for $599. Another new model, the Eee PC 1000, with a 10-inch screen and 40-gigabyte solid-state drive, is going for $699.

At that price, it matches many full-size, budget laptops that have the capacity to run standard programs.

“Consumers can spend $500 or $600 and get a low-end, full-function notebook,” said Mikako Kitagawa, lead PC analyst for Gartner Research.

The average price for a notebook at the end of the first quarter of this year was $939, a price that is expected to drop below $900 when second-quarter results are tallied, she said.

“For that amount, you can get pretty much a decent system, with a really good-size hard drive, 15-inch screen and run almost every kind of program,” Kitagawa said. “You don’t have to give up on anything.”

“The big question is if this is a sustainable market,” she said. “For it to be sustainable, the prices of these (ultraportable) devices needs to be in the $300-to-$350 range.”

Acer's 'first Internet device'
Acer this week launched the Aspire one, described by the company as its “first Internet device.” It is available online, and will be in Best Buy stores late next month.

Pricing begins at $379 for the Linux version of the 2.1-pound computer with an 8.9-inch screen and 8-gigabyte solid state drive, and goes up to $499, depending on the configuration purchased. Another version, with Windows XP Home, will be available in August, and starts at $399.

In April, HP came out with the HP 2133 Mini-Note PC, a model it dubs the “HP Mini,” which starts at $499, has an 8.9-inch screen, 4-gigabyte hard drive and weighs 2.6 pounds.

Originally, the Mini-Note PC was targeted “more at students and educational institutions, but we’re seeing much broader interest,” said Kevin Frost, HP’s vice president for consumer notebooks.

“There are consumers who just want to do a few things on a computer, and do them well,” he said.

“They want to get access to the Internet, they want to get access to e-mail, and they want to do that in a quick and convenient manner, so that’s the real value proposition of these notebooks. They’re lighter, smaller, easier to use and they use less power.”

The HP Mini is “almost an accessory notebook” as a second, or even third, laptop for some customers, including travelers, teenagers and those of “the MySpace-YouTube-Facebook generation,” Frost said.

“There’s such a strong demand by people looking for an easier way to get on the Internet. Some of the easiest-to-use consumer products, like an iPod or a cell phone, tend to be products that focus on just doing one or two things well. I think it’s a lesson that, sometimes as computer manufacturers, we struggle with because we try to have products that let everybody do everything.”

Small percentage of market
The ultramobile notebook market is still “very small,” said O’Donnell of IDC, which estimates it at between 2 and 3 percent of the worldwide notebook market, with between 65 million to 70 million notebooks shipped the first half of this year, he said.

And so far, it has been a market dominated by Asus.

“To Asus’ credit, they’ve created a product category essentially out of nowhere,” O’Donnell said. “They have raised their brand awareness level to a staggering degree. I mean, six months ago, if I’d asked you who Asus was, would you have known? Now, a lot of people do.”

In a report earlier this year, Gartner said “the new market segment for low cost ultraportable PCs is an expanded market, bringing in new users, rather than cannibalizing existing products.”

However, if prices on the little laptops aren’t all that much less than for full-sized notebooks, only consumers purely concerned with mobility may opt for the lighter devices.

“The real serious problem we see is that the price point on these things bumps into regular-size notebooks, and they do so in such a way that we think is going to limit the potential size of the market,” said O’Donnell.

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