HP & Dell: how to make your netbooks dominate the market


I am in a unique position in that I get to speak with the teams at major OEMs that make notebooks and netbooks.  These conversations are often frank discussions that prove how these companies are trying to understand the new low-margin netbook segment and how they can serve their customers.  I see a recurring theme to these discussions that show me that major OEMs are having trouble deciding how to attack the netbook market.

I’ve written about the netbook problem before and how it’s tough for the OEMs to distinguish themselves on an ever-crowded playing field.  The OEM reps I speak with are really struggling to come up with a way to distinguish their own netbook products from all of the similar devices that are popping up all the time.  I must reiterate what I’ve said before and what I tell these companies in private: price is everything in the netbook segment.  The sales numbers required to make it worthwhile for large OEMs like HP and Dell to participate in a low-margin segment will only be realized when netbooks hit the big box retailers.  When mainstream consumers can walk into a Best Buy and see, touch and interact with a netbook is when these will start flying off the shelves.  I still contend that $400 is the tipping point price-wise for this to happen and I understand why HP and Dell are having a hard time coming to grips with that.

I am asked over and over by these guys how they can make their product stand out when netbooks are pretty much the same.  They keep asking me what special function or feature they can add to their netbook to set themselves apart from the crowd.  My answer is always the same to them: do not add "special" anything as that can only add to their price.  I can’t state strongly enough that price is everything so while it might be cool to add special feature X to your offering it will only hurt you in the marketplace as that will make your price higher than a lot of the netbooks coming out of Asia.

Their response to this statement is invariably "then how do we set our product apart from that crowd?".  Listen up HP and Dell to what I have to say.  This is the easiest question to answer for you guys and I’m surprised you don’t get it yet.  Mr. HP netbook guy you already have the single best advantage over the many OEMs releasing netbooks today:


Yes, that’s right.  You are HP and your logo represents the quality and innovation behind it.  It represents the global support infrastructure you have operated for years and years that proves you stand behind your netbook, even though it’s cheap by notebook standards.  So what else do you need to set yourselves apart from the crowd?  You already have an advantage so produce a solid netbook at a competitive price and tell the world why yours will be supported better than the others.  When you have an advantage then press it! 

If you really want to distance your netbook from the rest then add to that advantage.  Make sure it comes standard with a 6-cell battery, produce a line of accessories that augment the user experience should they desire.  Offer a reasonably priced augmented support package that can be purchased at the time of the original netbook sale that removes any doubt in the buyer’s mind that your total package is better than the rest.  Press your advantage.  If you build it, they will come.  I am certain of that.

The netbook segment will grow huge I predict and you ignore it at your peril.  You will start to see your notebook sales drop as a result so you’d better be in the netbook market, and soon.  Imagine this scenario:  consumer is in Best Buy (or similar retailer) looking for a simple computer for the home.  They see two similar netbooks side by side, an Acer (or Medion, or MSI, etc.) next to an HP netbook.  Both are roughly the same component-wise and both are $400.  Which one will they buy?  The HP of course because it is a known brand.  They have used HP products before and they know you’ll be around should they need support.  Get it now?



PS a touch type pocket netbook can also sell for a higher profit margin say $500 to $1500 depending on the internal specs.

HP could just take their old tooling for their old HP Jornada 728 and stuff full PC technology into it. If OQO can make a full PC smaller by 35% compared to the 728, then HP should be able to at least make it fit the old 728 form factor. If they could make it slimmer in height that would be great!


Here is the answer make a netbook that is jacket pocket in size with a touch type keyboard. That way it will solve the unfullfilled gap of mobile business people whom do not really want a laptop and the other mobile folks using muiltiple devices yet not directly infringe on laptop sales. Make it 6.9″ to 7.4″ max in length, 3.5″ to 4″ in width, and as thin in height as possible. Build it around keyboards like the Psion which at 6.9″ x 3.6″ had the best touch type keyboard for handhelds and was the smallest size.


I believe the sweet spot for netbooks is $200 and up.
$200 for a barebones system that can surf and email … then give options to add RAM, speed, functionality.


i know HP reads this but my guess is that they will screw it up just like Dell has. my gut feeling tells me that they will introduce another me-too device that is going to be a Wind clone in every way from specs-to-price. instead of at least taking their Wind clone & introducing it at rock bottom pricing to seize market share.

whether you like the Aspire One or not. nobody denies that is by far the best value on the market for everything you get at just $399. if a company like Acer can do that then you know HP or Dell could. but in their shortsightedness by trying to squeeze a few extra bucks form each machine they will lose considerable potential market share.


I have been thinking about this a bit since I purchased the Dell Mini 9, which in my opinion, is a bit of a let-down, and I wish I hadn’t waited this long for it.

In my opinion, none of the netbooks on the market is a clear winner to me, with the sole exception of the new Asus N10. What appears to make the N10 such an exceptional product is the same thing that I think the HPs and Dells of the world can make themselves stand out: it offers a solidly-built netbook with high-quality components that are not found in similar competitors’ offerings, at a price that is still less that the cost of a new Lenovo X200 (though not much less).

Up until now, every netbook that has been released since the original Eee 701 and the HP Mini Note are all ‘me-too’ devices. There is a reason people can’t tell them apart. Their components are usually lackluster and barely adequate for the simplest tasks; their design typically a Eee-knock-off; and none of the keyboards seem like something a user wants to use for more than 10 minutes (though the MSI and HP keyboard offers more usability than most). On top of all that, the build quality is usually laughable.

If HP and Dell are serious about coming out with a winner that is going to corner the netbook market, they only need to come out with a model that offers quality components, notebook-like features (eg. 6 cell battery, standard bluetooth, decent speaker, 1-2GB RAM), and a non-compromised keyboard, at a price point that is between $600-$750. If they can add an entry model at the $400 level as well, that’s even better.

I for one am still waiting for the killer netbook out there.


I think all students in K thru 12th grade should be required to have a netbook. However, the operating system must be Unix (Mac OSX preferred). It is time to start moving our youth away from Microsoft, for the betterment of mankind. Besides most college students these days already use Macs. If the MacIntosh is the dominant OS in college than it needs to trickle down to the next generation as quickly as possible. Netbooks are going to RULE THE WORLD someday. Keep your fingers crossed.


I’ll agree with James in that this segment needs to hit mainstream. Case in point – I’ve been wanting to get my hands on a mininote. None of the HP resellers in my area had any they could show me, and HP does not send out evaluation units. My only option was to purchase and risk no refund if I wanted to return it or not be able to return it at all. That’s a tough deal to swallow when you just want to touch/feel it, fire it up and potentially try software on it to see how it runs.

Fortunately, if you purchase the mininote through HP direct they offer a 30-day return with full refund minus a flat $15 return fee. At least I can get one and see if my software runs on it, and send it back if it doesn’t work for me or I get a better price elsewhere.

I believe HP already has a great product (mininote) thanks to the build quality, screen and keyboard. Put that top model on sale at Best Buy for $649 and I’m certain HP would see more sales.


I agree with you James. Simple and cheap is best. I would definitely buy an HP or Dell over an MSI or Acer it The keyboard were usable. I do want an 8.9 inch PC with a flip screen and touch. But I dm think that’s what a netbook should be.

James Kendrick

I agree there should be options, that wasn’t the purpose of this. I do believe I am right though in pointing out to the OEMs that their branding is an important differentiator for the average consumer. Choice is good though and I agree with that opinion shared by many.


I think a low starting price with a capable spec is most definitely important for most consumers but there should also be better options. I just don’t want to waste $400 on a machine I know has limitations I’ll bump into on a daily basis.

I could afford a few hundred bucks more for a netbook so how about offering me a higher resolution screen and more capable hardware in the same form factor? I’m specifically looking at the Everun Note here.

As for HP’s advantage, I have to disagree based on my experience. I’m going through the process of a second show stopping fault (mouse pointer randomly clicks around bottom right corner of the screen) with my HP TX2000. Frankly I just want the machine out of my hands, I love the innovation HP but your quality and support sucks in the view of this customer.

Gary Garland

Hi – my first post – worth exactly what the reader has paid for it.
I will respectfully disagree with the viewpoint that price and brand name are nearly everything in the netbook segment – surely important, but not the whole tale – the general adage seems to be the netbook is intended as a supplement – puny and size, and a bit more than puny in performance – so if we’re looking for something other than our “daily driver” there will be folks who want a better screen, for others like me a decent but not great screen is alright, but the keyboard is critical to me – for others, it might be battery life or speaker volume or whatever.
As the price hikes above $450 or so, it starts ending up in the notebook category – and for about $500 you can get a lot of notebook, especially compared to a few years ago. for about $600 i can get a bulky but relatively powerful lenovo – so if i want a new little buddy, it has to do what i want it to do. i thought it was “instant on” with the asus drives. i thought it was a 6 cell msi. now i’m thinking it’s the lenovo – not for name (though that’s an element) but for what i hope the keyboard is like. to me (and possibly other netbook shoppers) the brand is almost irrelevant – in these days of OEM and rebadging, i’m trying to figure out “who’s zooming who.”
yeah, i’d prefer hp or lenovo over averatec based on past experience. but all things being equal, if the averatec buddy is say, $50 less, that could sway me. or maybe someone else wants lenovo blue or red. or (gasp) the msi love edition?
i think this segment is going to be hard to understand — i do see an incredible alure to cheap functional netbooks. i haven’t paid more than $1,000 for a desktop in probably 10 years — and probably 4 years for a notebook – and i don’t plan to go back to high prices, either – i can either wait it out, or buy something cheaper (and less powerful) – but hey, i’ve got consoles for video games.
okay, end of .02 – and worth exactly half of that :)


WOW James, I think I disagree with you.

The problem here is you seem to not reconize the inherent advantages to netbook size while still running a full version of windows. The OEMs need to play up these advantages thus making a netbook purchase not a replacement for a bigger notebook but in addition to a notebook.

The guts of a netbook dont need to be attached to a screen or even a keyboard. HP can sell them inserted into 100 things

HP should start offering bundles with their Projectors for making presentations. Preload the netbook with Powerpoint or a viewer and then offer a carrying case so the projector and netbook are all in one.

Build a netbook into a projector for a true all in one package.

Build a netbook into am HP TV. Offer a Bluetooth keyboard.

Install netbook guts into HP Business Copiers. they can contol the copier and also be used to pull up web pages right at the machine or contact other users on the network via IM or email.

Install netbooks into Business phone systems.

Install netbooks into fax machines.

Install a bar code reader into it and make it a portable point of sale device.

Install it into a TIVO or other recording device.

Hang it on a wall and make it control my HVAC and burglar alarm system.

Stick it into kiosks and let it run 24 / 7 in malls and displays.

Give me a holder and let me install it, the entire netbook, in my car.

HP can differintiate themselves by putting their netbook guts everywhere. I want the power of my netbook in my jogging machine at the Gym. Built into the door of my Refrigerator where I can pull up recipies and show my scanned in kids art work. I want those guts running my cloths washer and dryer. ( A washing machine with 50 cycles you can fine tune for temp and time and spin speed and then emails me when it is done.) James you seem fixated on the netbook form factor. It has much power beyond that if it is just unleashed. Just my thoughts.


limiting device to a single boring vanilla build is stupid. no company does that – no consumer wants that.

$300: barebones entry level – 512MB RAM, 8GB SSD (nothing smaller so grandma can fit XP)

$400 – $500: mainstream level – 1GB RAM, 8-16GB SSD/80GB – 160GB HDD, expanded battery

$500 – $700: enthusiast level – 1GB+ RAM, 16GB+ SSD/160GB+ HDD, expanded battery, cell-based net, high rez, touch screen, convertible*

ALL models should offer Linux or XP


one thing ive learned from these opinion based pieces is that no matter how many people disagree, you will always respond twisting your original statement.

you keep pushing for this idea of a single cheap $400 device, which is just silly. all people have been telling you is that while its okay to have a cheap entry level device for the mainstream consumers that YOU are talking about, there is nothing wrong with having more expensive add-on extras for the enthusiast. that is exactly how the regular PC market works as well. why would you want a company to deny the consumer choices? you already complain about these devices being to similar well forcing them too all be $400 would make them even more similar.

for people who think that they will wind up buying the more expensive models anyways, well of course because obviously their an enthusiast visiting these boards. but most mainstream consumers will be fine with the entry level device.


I agree, price is an issue, 400 bucks is the magic price on the low end. But, there are those in the mainstream that remember spending 1200-1500 bucks on a laptop with decent features, warranty, etc. This is not a high end laptop, most spend about this price for a Dell or Apple 13 inch.

So a netbook for 500-600 bucks that is decently priced, has all the features you might need, solid build, and with the name brand will sell.

The biggest thing are the reviews, what does jkontherun, cnet, laptopreview, all of them think. I read 12 of them before making a purchase. My parents come to me for advice. I’m sure those that are mainstream know an enthusiast to go to for advice. Once you impress us we can help those that dont know. If I tell someone mainstream that this is a bad product, they listen and will even tell others.

Frank McPherson

I think it is very telling that HP is selling the Mini Note on their small business web site rather than their consumer site. They know it is not targeted at the same market as the Asus Eee. What is funny about this is that when HP started spreading the rumors about the Mini Note they were referring to it as an accessory that would be a no brainer for any of us to purchase.

But you know, HP has a history of higher priced handheld devices. If I recall some of their Jornada handhelds were significantly higher in price than other products.

James Kendrick

Britt, I am not talking about the enthusiast consumer who is often willing to spend more for advanced capability. I am referring to the mainstream consumer who is focused on price solely. For these large OEMs the netbook is not going to be their only device on the market so they will continue to offer all the choices we want.

No, I am strictly referring to the $400 netbook category which are all “me-too” devices, which they have to be to meet that price point. That’s why I say pric is king. quite frankly the enthusiast consumer segment is not large enough to keep these OEMs making netbooks. They have to hit the mainstream and that’s the market segment this article addresses.


Price is an EXCELLENT suggestion, leaving features that differentiate it from others as upgrades. We all end up upgrading anyhow, making that $399 really end up being $699. But having that $399 price is what forcefully snaps our head around to the product as we walk by it in Best Buy… “that netbook is how much?!?”.

The one thing I think is INDISPENSABLE in a netbook is a touchscreen. Preferably with a screen that swivels and lies flat on the keyboard tablet style. I’m waiting for a nice name brand touchscreen tablet style netbook that has a decent sunlight viewable screen for $399, then I will happily upgrade the crap out of it and walk out with a dream netbook for what I figure will be $699 or so.


something i disagree with you on is price, all you ever say is “cheap” & leave it at that. while i agree they do need cheap models i find NOTHING at all wrong with them offering “extra features” for a higher price. it will offer more variety to pick from & some of us dont mind paying a little more to get what we want. even these $700 & above netbooks are a bargain compared to what ive been paying for ultraportable PC’s all these years.

your “advice” does nothing but saturate the market with me-too devices. essentially all you told them was to offer netbooks at the same price as the other guys with NO separating features & hope that their “support” will sale them. maybe its true, maybe it will sell them. but then if HP/Dell are the only 1’s in the game the prices will go back up & innovation will stop.

the single best advice i can offer HP/Dell & what will absolutely set them apart from the crowd is to make their devices AVAILABLE. i am so sick of going on netbook treasure hunts. while Asus has done a decent job Acer/MSI have royally F’ed up their entire production line.


James, I agree with you 100% on HP/Dell/Compaq/Toshiba having an instant advantage due to name recognition.

I’m looking for an 8.9″ Netbook with a touch screen and a Fast SSD or HD and a 6 cell battery.

I was leaning towards the MSI Wind, but as I have two brand new 14″ Dell D630s from work (one locked down as a desktop, and one open for my experimentaions), I feel that the current ever increasing screen size is of less importance to me.

Indeed, a 8.9″ slate tablet with netbook specs would be great…

Aura Mae

And either make them in assorted colors or sell color swap kits. (And by color I don’t mean your choice of black or white, Dell! You sell another affordable laptop in a variety of colors, so snap to it!)

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