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 - Get Report) 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.