The School Year Opening - A Critical Period for Sub-notebook Sales

With Asus having lost both first mover advantage and early dominance in the very market segment it created with its Eee PC 701, the coming school year opening is shaping up to be a more-than-usually critical period for not only Asus but as well as the horde of competitors, first-tier and otherwise, in the fiercely-competitive low-cost subnotebook market. Put simply, whoever is able to establish significant market share will have a headstart going into the lucrative holiday season.

While Asus may have arguably created the low-cost subnotebook market when it released the Asus Eee PC 701 back in October last year, it miserably failed to capitalize on its early lead when it assumed the competition won’t be able to catch-up until the 2nd half of this year. In the interim, it went wishy-washy on how to position the product line and ended up with a half-baked “it is not a notebook” campaign that did not succeed in pushing it as a consumer appliance as well. Moreover, it managed to dilute the Eee PC brand by introducing non-related peripherals. The worst part was its attempt to play up with competitors who failed to match the value-for-size and value-for money of the Eee PC and ended up chasing after them instead. If it had instead concentrated on keeping the price low and simply added more features, its Eee PC would still be in a very dominant market position.

So now the market is wide open with no clear-cut winner. Major players include the HP Mini-Note, the MSI Wind, the Acer Aspire One, among others, with Lenovo and Dell soon to join the fray. Chipmaker VIA has open sourced a subnotebook design as well. In addition, there are several third-tier players nibbling at the low-end. Significantly, a couple of companies have also announced PDA types with the subnotebook form-factor, selling for under $200. In fact, one model, the Jointech JL7100 uses what seems to be an identical Asus Eee PC 701 casing. Asus itself has introduced several models as well, providing for an overwhelming range from which consumers can choose.

With the school year opening, which is traditionally one of two peak periods for computer resellers, the other one being the holidays, the lack of a dominant player obviously means a mad scramble for market share. The timing could not be more crucial.

First, while the segment has enjoyed brisk sales since its introduction, overall sales are still a fraction of overall notebook sales. Meaning subnotebooks have not really gained critical mass in the mainstream. For the most part, buyers still belong to the first wave of adopters, albeit an extended first wave. A successful school year opening sales would not only “legitimize” low-cost subnotebooks as mainstream, it will build the foundation of for a bigger surge during the holiday season.

Secondly, the education market is projected to account for a significant share of subnotebook sales. An endorsement by schools and universities will effectively bring the subnotebooks to mainstream acceptance. The caveat is that there are now so-called “low-cost” model with configurations and prices closer to mainstream notebooks. If these are the ones endorsed, such certification would not really mean much for the genuine low-cost subnotebooks.

That said, still whichever model manages to establish itself during this period will likely carry that into the holiday season. So what does that mean? Expect price cuts. Expect new configurations. All just in time for the back to school sale.

Will there be a winner? It all depends. But if anyone can offer a model that will adequately support the needs and requirements of students in a package small and light enough to “disappear” into a backpack and at a price that won’t hurt so much when it is damaged or lost, the model will be an attractive buy. Features should include the following:

Screen size a minimum 8.9” size. Battery life probably at least 4 hours. WiFi a must. Size about that of the original Asus Eee PC 701 or just a tad bigger both ways. The OS must be almost instant-on (less than 20 secs). RAM should be adequate to let the OS and Office-type apps run smoothly. SSD storage size is not critical as long as it is upgradeable. Keyboard lay-out, tactile feedback, and key sizes should be sufficient for touch-typing.

Gaming capability is not an issue since users will unlikely use the device for serious gaming.

Price should be under USD300 but will probably be higher. But if you have all the above at under USD200, the product would be an instant best-seller.

Have we just described an existing model? You be the judge. Though come Christmas time, we wouldn’t be surprised if there will be couple or more models that will fit the above description. Happy shopping then!