This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Dell, Hewlett-Packard Adapt to Netbook Nemesis

NEW YORK ( TheStreet) -- Netbooks could be cooling off, but the netbook effect continues to chill the PC industry.

The arrival two years ago of the lightweight, stripped-down, $300 mini-laptops made by Asian shops like Asus and Acer exposed a vulnerable underside to the PC industry.

Now, in response, giants like Dell (DELL) and Hewlett-Packard (HPQ - Get Report) are courting the close-to-cheap market with new models that run on faster chips with bigger memories and have smaller price tags in the $600 range.

"We're already seeing the big PC makers responding in two ways: by getting into the netbook game themselves, and by pricing their notebooks more competitively," says Peter Rojas, co-founder of consumer-tech Web site gdgt.

The race to the bottom has placed average PC selling prices on an even steeper slope than usual.

And while today's cheaper devices certainly fit a leaner, more recessionary time, the netbook's influence on the industry will drag on for years.

"The sub-$500 average selling prices stand to be a deflationary force for all notebook PCs over time," wrote JPMorgan analyst Mark Moskowitz in a research note last month.
The Netbook Discount
Average PC prices worldwide
Source: JPMorgan, Gartner

Feature inflation meets price deflation

For years, in an effort to keep prices up, the PC industry kept piling on more hardware capacity, software muscle and processor speeds. But the sudden success of the netbook revealed how far PC technology had overshot the user, says long-time industry analyst Ashok Kumar.

Netbooks gave people cute, portable devices on which to do most of their daily tasks such as checking email and viewing the Internet. And the prices, at about a third of those of laptops, were killer.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DELL $0.00 0.00%
AMD $3.61 -3.22%
INTC $31.11 -2.02%
HPQ $12.57 -1.49%
NVDA $36.20 -2.98%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs