HP enters the low-cost laptop market (kinda)

HP, the current #1 global PC seller, has entered the mini/low-cost laptop market:

Photo by Paul Sakuma, AP of Christine Wright of Hewlett Packard with their new mini-low-cost-laptop

HP’s foray comes in the form of a new computer called a “Mini-Note” that weighs less than 3 pounds with a screen that measures 8.9 inches diagonally. The machines start at under $500 for a Linux-based model. Prices go up for Windows Vista models with faster processors.

The processors HP is using are made by Via Technologies Inc., the distant third-ranked player in the microprocessor space, and come in clock speeds up to 1.6 gigahertz. The inclusion is a big win for Via, which trails Intel and Advanced Micro Devices Inc. by a wide margin in the microprocessor market. HP executives say the only major feature its Mini-Note lacks is an optical drive for ingesting DVDs and CD-ROMs, which can be bought separately.

Interesting decision to go with Via, and odd decision to make it Vista-bloat-compatible. HP, like Intel, is still missing what I see to be the important key in the low-cost mini laptop market. If your new product is essentially the same as other laptops, just smaller and lighter; you're not escaping the pressures that will eventually drive you to adding more or the same. Further, price points at $500 aren't terribly exciting and certainly won't inspire people to start "buying two laptops:— a lightweight one just for Web browsing on the go and the full-power machine for the home or office."

Both HP and Intel seem to be aiming at a sub-notebook market, which I think is a failing proposition -- it will either subsume or get subsumed by the normal laptop market and compete on speed/memory, storage, features (webcams, tablet-mode, etc.) as well as weight and portability. At best there'll be slight market segmentation as one branch goes towards the Air - light but large-screened, and another towards ultra-portability by sacrificing the screen size.

If you want people to buy a second laptop that doesn't overlap their "desktop replacement" style system, you have to go cheaper (under $300 I'd think) and someone has to figure out the use cases for this system. OLPC envisioned a specific use case for their XO and created a machine to fill that niche. HP and Intel can't seem to disconnect their thinking from standard laptop usage, and their products suffer from it.

So what are the use cases for the ultra-portable, low-cost laptop? I can think of a few from my usage of the XO during my daily routines -- lug around the house to surf and IM while doing other things like watch TV, listen to music, or hang out on the porch. Carry into the kitchen to display a recipe. I intend to take it on a plane and hopefully watch a movie or play some old-school games (tetris, etc.) on it. Read documents (on the porch, metro, at the gym, etc.). Take notes.

These use cases suggest the need for portability (light, easy to toss in a bag, reasonably rugged), long (5hrs) battery life, high-contrast screen for reading, tablet mode for gameplay/movies/reading, somewhat protected from the elements (or at least flour-covered fingers), wifi for connectivity wherever, and the XO's handle is fantastic in toting it with me around the house without bothering about a bag. None of these use cases requires much HD space (movies can go on USB keys, it's not my media center), or excessive graphics or power (2D is fine, it just needs to be strong enough to do video playback).

Basically you're trying to hit a sweet spot somewhere between a good PDA and a small laptop. You need enough flexibility, functionality and power that the PDA market won't overlap you (it's gotta be worth carrying around both this device /and/ an iPhone, Treo, or blackberry), low cost enough that people who already are saturated with computing devices still see the need for it, and with its own unique value proposition that there's a reason it's more useful than a normal, more powerful laptop would be.

The XO seems to still, hardware-wise, be the best device in this new paradigm, with the Eee and the Elonex also getting the right idea but not executing fully. Intel and HP, not to mention Fujitsu's LifeBook, all are trapped in the laptop paradigm.