Tuesday, February 2, 2010
ANSWERING JOE WILCOX' ARTICLE IN "BETANEWS"
I couldn't resist commenting on Joe Wilcox's blog article "Sony shows how to lift Windows PCs out of the low-price doldrums" http://www.betanews.com/joewilcox/article/Sony-shows-how-to-lift-Windows-PCs-out-of-the-lowprice-doldrums/1265139557 , which is the antithesis of the content on my blog:
Feb 2, 2010 - 5:03 PM [EST]
Well, Joe, you make a good argument, but you got it right the first time: What we are seeing is commoditization.
I have a whole blog dedicated to this, to the Alpha 400 and other cheapEST computers. If you live in New York City, you can prove to yourself, by visual observation, that maintaining ASP in PCs is the Impossible Dream. Go into any of the hole-in-the-wall cheap-electronics storefronts in Midtown (mostly) and you will see mini-laptops -- not worthy of the name, some would say -- that you can buy for around $100 any old day, no contracts and no strings attached. This might be true in other big cities as well, or soon will be.
There are literally thousands of sources for these cheap ARM-based notebooks in mainland China, hundreds of *manufacturers* even, all making basically the same no-name product -- that is, usually with no brand-name at all. Some have even set up shop in the USA, online and on the street.
Cheap products for the Chinese market can be sold cheaply here as well. They will flood the market and drag all ASPs down with them. You can even order these direct from China, often with the seller paying your shipping cost, on a single-unit basis, and your payment is even protected by something similar to PayPal (no delivery, no money). Unstoppable. (I am not giving my web address, but I had to respond to the very interesting article.)
HERE IS JOE WILCOX'S BASIC ARGUMENT, BUT GO TO HIS WEBSITE TO GIVE HIM A FAIR CHANCE:
"Sony shows how to lift Windows PCs out of the low-price doldrums"
"Windows PC vendors can effectively raise selling prices -- not that it will be easy, particularly as long as they sell netbooks. One Windows PC OEM shows the way. Today, Sony announced new E-series laptops packing Intel i3 and i5 core processors and boasting, brashy colored exteriors. The $799.99 price is about $326 more than the average selling price of laptops sold at US retail in fourth quarter, according to NPD data."
"Selling Prices in Free Fall"
"US retail average selling prices fell for both Macs and Windows PCs during 2009, but for different reasons. For Windows PCs ..."
"Their wicked toll: In fourth quarter, notebook ASPs (including netbooks) declined to $473 from $604 a year earlier. Desktop ASP: $488 down from $533 year over year. Thank you, netbooks. May you burn in hell."
"By comparison, also during fourth quarter, Mac notebook ASP was $1,359 down from 1,507 a year earlier. Interesting trend: Mac laptop ASPs also fell below desktops. The desktop ASP was $1,366 down from $1,471 a year earlier."
"To Acer, Dell, HP and other Windows OEMs pushing cheap PCs, I say this: If you don't offer a premium brand with premium features at a reasonable premium price, your customers' next computer purchase will be a Mac. Get it?"
Again, Joe Wilcox's article is well worth the time to read it, and you can do so here: http://www.betanews.com/joewilcox/article/Sony-shows-how-to-lift-Windows-PCs-out-of-the-lowprice-doldrums/1265139557