Netbook Prices Are Now Falling - NYTimes.com

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The personal computer maker Acer said Friday morning that it was cutting the price of its Aspire “netbook” to $349 from $399. It’s cutting the price of another netbook,Microsoft Office 2010 Professional Key, the Linpus Linux Lite, to $329 from $379.
None too soon.
The entire category of so-called netbooks – personal computers designed primarily for Internet use – may be headed over a price cliff,Microsoft Office 2007 Professional, according to industry analysts.
That notion was one take away of the Intel Developer’s Conference, which took place in San Francisco this week. A major topic of the conference was the growth of the category of netbooks.
“Dozens and dozens of netbooks were shown,” said Richard Doherty, research director for Envisioneering, an electronics market research firm. The computer makers saw for the first time “just how many competitors they have.”
Mr. Doherty said the netbook makers realized something else: “It was a time for reflection that maybe they need to be more aggressive on price.”
Heavy price competition is never a happy thing for manufacturers. More broadly, this netbook category has been a mixed blessing for the personal computer electronics industry.
The category threatens to upset some very established computing giants – from Microsoft to Hewlett-Packard – because they don’t require the powerful on-board software and computing power that have driven marketing and sales in the past.
Intel has said that it was fully embracing the category because it sees the opportunity to help drive and capitalize on a new market.
But Mr. Doherty noted that at the developer’s conference, industry analysts were hitting Intel pretty hard on whether the relatively low-cost chips used in the netbooks might lead to cannibalizing of Intel’s higher-end processors.
As far as consumers are concerned,Genuine Office 2010, Mr. Doherty said,Office Standard, analysts seemed to think the prices would continue to fall. In the near future,Microsoft Office 2010 Professional Plus Key, netbooks could sell regularly for $299, and might well drop by the holidays to $249.
“There’s a lot of price sensitivity,” he said. “They could cost the same as a cell phone – or lower.”