Acer Review, Asus Review – Netbook 10

A mistake I see netbook companies make again and again is not recognizing the huge importance consumers place on price. The whole basis of the netbook market is ‘cheaper’ than laptops while providing most of the functionality.

Customers already have an understanding that netbooks are not laptops. The specs that most netbooks have are impressive, and netbook manufacturers should not get left behind on these. However price is crucial – Lower prices is why customers are buying netbooks rather than laptops in the first place (closely followed by portability – smaller size; longer battery life).

Price is All Important

Look at the current situation – we’re in the middle of the biggest recession/depression since the Great Depression. Stocks just hit a 6 year low. Consumer confidence is at an all-time low. Price is critical. There will be niches like gaming netbooks and luxury netbooks (that Asus is addressing well with their netbooks) – However, those are going to be just a few percentage points.

The overwhelming majority of netbooks sold will be bought by customers looking for solid bang for the buck and low prices. Here are a few guidelines -

1. Don’t make the mistake MSI did and market your netbooks at $100 higher than the competition. MSI learnt from this and now has cheaper netbooks.
2. Don’t make the mistake Samsung is making by having a netbook $100 higher than its competitors.
3. Don’t confuse customers by having 22 different models like Asus has in its Asus EeePC range.
4. Keep the value for money proposition clear and obvious.
5. Focus on the functionality and features really important to netbook customers i.e. price, portability, battery life, large enough screen, large enough keyboard, extensibility/modifiability, and looks. Don’t focus too much on gimmicky features like the MSI Wind U120′s face recognition stuff.

Hit the Minimum Bar for Performance

You still have to hit the minimum bar i.e.

1. Windows XP home.
2. 1 GB Ram.
3. Large Hard Drive.
4. 10″ high quality screen.
5. 85% or ideally 93% size keyboard.
6. Good usability.
7. 4-5 hrs+ battery life.

There’s a Real $350-$400 Price Sweet Spot

Look carefully at what Acer does with their pricing. Look at what MSI’s new pricing is – there are two price points that hit the sweet spot – $350, and $400. This is where netbook manufacturers can manage to fit in enough features to make netbooks very compelling, and at the same time keep the price low enough to make them a much better choice than notebooks.

If your main model is higher than $400, its super compelling Feature X is not going to matter. MSI is advertising $400+ U120s on their home page with bluetooth and face recognition. Amazon and Newegg are selling the $349 model with no bluetooth, and no mention of facial recognition. That right there is telling you what retailers are actually having success with.

Look at the top selling netbooks and laptops list on Amazon – 4 out of the 5 top selling netbooks sell for between $349 and $399. The 5th sells for $319. #6 is a 15.4″ screen laptop with 4 GB for $649. If you’re hitting a $400+ price, you’re in competition with the big boys. In fact, the only bestsellers above $400 amongst netbooks are two models of the Samsung NC10 at #9 and #12. The Samsung is arguably a better netbook (at least in my opinion) than some of the higher selling ones. The high price handcuffs it.

The Acer Aspire One AOD150 at $349 is $100 cheaper than the Samsung NC10 at $449. That’s why it’s at #1 while Samsung is at #9. Ignore consumers’ sensitivity to price at your own peril.

Related posts:

1. The Netbook market – Some research

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