HP, Dell Challenge Asus in Low-Cost Laptops

Dell plans to launch an 8.9-inch laptop for less than $499, while HP's Mini-Note PC will soon be available for $499

This year will be the year of the ultra portable, low-cost PC. While chip maker Intel is putting its might behind its Atom low-cost processors made specifically for such small-screen devices, the segment has aroused the interest of PC makers HP and Dell, which will launch ultra portables this year.

Players like Asus, which already has the 7-inch Eee PC, will also launch an 8.9-inch version with more features, while closer home, HCL Infosystems is banking on its MiLeap laptops.

"We will see many smaller laptops come into the market with players like HP and Dell launching their products later this year. There is certainly potential for these devices. If we look at markets like Malaysia and Philippines that are similar to India, Asus has seen demand exceed supply for its Eee PC," says Gartner principal analyst Diptarup Chakraborti. The laptops are targeted at school students, women, salesforce and first time PC users.

Dell plans to launch an 8.9-inch laptop made by Taiwanese contract manufacturer Compal Electronics for less than $499 (Rs 19,960). HP's Mini-Note PC, targeted at the education segment, will soon be available at a starting price of $499.

Asus, which has sold over one million Eee PCs since its launch late last year, made its India debut early this year with two 7-inch laptop models, priced Rs 14,000 and Rs 18,000.

"We don't just compete on low cost but look at a more specific target audience - children and first-time PC users with simple needs of Internet access and basic multimedia functions," says Asus India product manager for notebooks, Francis Kao. Asus India, he said, is selling a few thousand units per month and is looking at collaborating with schools to promote the laptops.

Indian PC firm HCL Infosystems launched its MiLeap range of ultra portable PCs in January this year. Initially launched with a Linux version priced Rs 13,990 onwards, the company recently launched a Windows XP-powered MiLeap for Rs 16,990, touted as the cheapest Windows XP laptop in the market.

"The response to MiLeap has been good. It's still new and the newly-launched Windows XP-powered version will offer greater choice to the consumers," said HCL Infosystems executive VP George Paul. Analysts say the response to the product has been muted in the first quarter but concede that the new category will take time to catch up.

"Indian consumers still have to get used to flash drives, which are the mainstay of these products," points out Gartner's Mr Chakaraborti.

Hovering around Rs 14,000, the entry level price of these laptops will go down further, says Intel's OEM business director Prakash Bagri. Intel hopes to play a role in that—it will launch the Atom microprocessors in June that are specifically designed for low-cost, Internet-centric devices. The chipmaker expects that many of the ultra portable devices entering the market later this year will be powered by Atom. "There is an enormous potential for these PCs. In markets like India, many first time PC buyers are buying a laptop," he said.

In 2007, there were 28 PCs per 1000 people in India, according to Gartner. Laptop sales in the country have grown at a triple-digit rate in the last three quarters, including the first quarter of calendar year 2008.

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