Netbooks Establishing 'Price Ceiling' for PCs?

Not long ago NPD Group produced a study that reportedly found, among 600 US netbook buyers, a significant minority were not entirely satisfied with the performance of the machines:

  • "58% of consumers who bought a netbook instead of a notebook said they were very satisfied with their purchase, compared to 70% of consumers who planned on buying a netbook from the start."
  • Among those 18-24, "65% said they bought their netbooks expecting better performance, and only 27% said their netbooks performed better than expected."
  • The chief feature of netbooks, mobility, is apparently not being used by most people who buy them. NPD found that 60% of netbook owners never took the devices from the house.   

Despite this apparent dissatisfaction, netbooks currently represent the growth segment of the PC market. I saw the ad from US electronics retailer RadioShack this weekend, promoting an expanded lineup of netbooks subsidized by US mobile carriers AT&T and Sprint. Here are four machines ranging from "free" to $399 provided users sign on for the two-year carrier agreement.

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During a recession and otherwise, it's very hard to resist these prices. Psychologically, what it also does to consumers is make them less willing to pay more than $500 (maybe $400) for a conventional laptop -- even without a carrier subsidy. (Apple Macs may be the exception.)

In the same way that $200 (with the subsidy) is now the ceiling for smartphones that want to compete in the US market, we may be seeing the comparable -- and wholly unintended -- establishment of a price ceiling for PCs. 


Related: TechCrunch's (potentially $200) "CrunchPad" now becoming a viable Internet tablet, though it still must address the connectivity issue.