Wednesday, January 21, 2009

Permacheap hardware sales numbers released

Amazon and Wal-Mart published the top 10 list of notebooks sold last week (courtesy of Barclays Bank). Leaving out the specific model names, grab a look at the prices and digest the coming impact of the notebook volume being dominated by the recent netbook introductions:

Asus $378
Acer $369
Samsung $480
Acer $369
Asus $321
Apple $1230
Samsung $450
Asus $339
Acer $380
Acer $371

Despite the compelling UI and reliability of the Macbook, a 3x pricing differential will be under unremitting pressure and will be hard to sustain for anything other than the niche market that Apple found itself relegated to 10 years ago. Companies in the IT space, when faced with direct permacheap competition must respond in kind, or differentiate in a disruptive way. The netbook introductions precisely represent an example of the innovation that fundamentally changes markets. A 3x pricing change, with only a minimally perceived performance delta (sorry MSFT, but many folk do not think of Vista as an upgrade...especially when Dell charges an extra $150 for an XP upgrade for a new system!!).

Undoubtedly, the 3x price is proving to be disruptive and compelling. Highlighting the pressure on Apple, and other established computer manufacturers that are accustomed to ASP's in the $1k range, is that Wal-Mart's numbers came in surprisingly similar to Amazon's (essentially, replace Macbook with a Dell Studio priced at $798).

For cool, customers can opt for a $99 ipod, or a 3G smart phone. Especially, when the later opens the world to permacheap downloaded applications for $.99-$4.99, see leading apps below:

iShoot $2.99
Mod touch .99
Slot Z 2.99
Monopoly 4.99
etc

Of course, there is a long list of free application downloads too.

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