Robt, outspending the competition on a commodity product may generate more gross revenue, but won’t necessarily result in higher net profit. The challenge in low-margin, price-sensitive markets is to understand target customers better than the competition and to deliver the right product in the most economical manner (i.e. product:market fit). Otherwise, manufacturers could try to leverage the low-end product to drive sales of other more profitable models (i.e. loss leader strategy).

With 10+ competitors in this market segment, though, it will be difficult for any manufacturer to generate a significant profit. A few hundred million dollars of low-margin sales will not be financially significant to a $60B Dell or a $100B HP.

Its the marketing dollars spent that really is the key behind brands and why Dell and HP will sell a lot of netbooks. Its obvious to say but marketing works and if you can outspend your competition on a commodity product like computers all the better.

Large manufacturers are best positioned to include netbooks under the umbrellas of existing brands (i.e. Inspiron 910, Amilo Mini) and leverage customers’ existing perceptions. Extending an existing brand also enables manufacturers to upsell potential buyers to more profitable offerings within the same product line.

Given that competing netbooks have similar levels of capability, I expect manufacturers to focus on non-functional attributes such as price, size, aesthetics, ease of use, configurability, reliability, warranty and support, distribution channels, ecological design, etc. In this regard, the manufacturers that “get it right” will likely take a systems integration approach to determine the best combination of product features and other attributes.

not that i am 1 to quote them, but i have to agree on this 1. this thing is a HUGE disappointment, overpriced & underspeced. i wont even get into the ugly design & Fn-less KB.

the Acer & Lenovo prove to be a far far better value.

I think the Dell and the HP are interesting cases.

Because the 2133 is really posited as a “premium” miniature notebook, while the Dell won’t be presented that way I’d imagine (obviously we’ll have to see when it is out). But this, coupled with HP not overtly pushing their device outside of asia (not to say it isn’t selling well, more that it isn’t the center of attention) versus what will probably be quite a big push from Dell will make this an interesting match up.

To me, I’ve had a good experience with Dell by way of XPS laptops – so I’m happy to buy their products again. Same deal with HP. Other brands though are more of an unknown, Acer for example, i’ve never really thought of as well built machines. So while brand isn’t necessarily a huge factor, I think it’s maybe one of those “little pebbles” that can build up to be a mountain of difference for any company that uses it right. Asus, for example, has definitely established wonderful brand recognition around their Eee PC’s.

HP is selling a ton of Mini-notes in Asia. I’ve heard their sales are increasing in Asia 50%/ month on the 2133 which is likely why they are not pushing them harder in the US. They can’t make them fast enough. I think brand is a huge “feature” on netbooks as otherwise they are all more or less the same.

unfortunately because of the name brand this will probably be 1 of the best selling netbooks, although it will be 1 of the worse overall (no F-keys KB, ugly design, etc). it’s ashame this will be the “face” of netbooks to the general public. i just wish for once Dell could do something right, when you follow quality products you really start to see how cheap everything is Dell does.

oh ya prices were just release, it DOESNT even come close to being as good of a value as the Acer. once again huge disappointment by Dell.

IMO there are two types of Netbook buyers.

First you have gadget geeks (dare I say most of the people who read this). This group does research, looks at all the options, accessories, mod-ability, cost, etc. Brand probably doesn’t mean a great deal to this group compared to say performance or keyboard configuration. We’re more interested in how it operates than the name on the lid and the warranty/service. It’s not to say those aren’t factors, but less than other points.

Then you have the general population who will buy based on brand recognition and popularity. A Dell could probably sell for more based on the name. Yes the will sell a LOT of Netbooks…I doubt anyone would question that.

@ Brad

I realize that they’re selling a lot. But, with a bit of a push, they could have something huge on their hands.

The Dell badge is without a doubt one of the biggest ‘differences’ on this machine.
Their online ordering system is world-class and combined with their brand awareness and brand quality gives a browsing, pondering potential customer zero reason to not order. The same happened to me a few weeks ago. I wanted a new desktop, couldnt be bothered to do the research so went straight to Dell knowing that i’d get service, top-quartile product and value and no-hassle ordering. The same will happen to millions of others.

Chippy.