HP's dv2 Is a Bigger, Better, Budget Ultrathin

Netbooks—really cheap, really small notebooks—have taken the PC business by storm. Yet I suspect a lot of buyers will wind up disappointed with the tiny screens, cramped keyboards, and limited processing power they provide. Spotting an opportunity, computer makers are rolling out yet another class of very thin notebooks for less than $1,000 with many of the features of models that cost twice as much. Having spent time with the first of this new breed, the Hewlett-Packard (HPQ) Pavilion dv2, I think the category could be a winner.

The new devices, with a 12-inch to 13-inch display and weighing less than 4 lb., look a lot like ultralights such as Dell's (DELL) sleek Latitude E4200. But until now such systems were aimed at executives and mobile professionals and carried price tags well north of $1,500. Like the Latitude, which starts at around $2,000, HP's dv2 fits easily in a briefcase or on an airplane tray table. It has a 12.1-in. screen, weighs 3.8 lb., and is 1.3 in. thick—a bit heavier and fatter than the Latitude. On the other hand, you can take it home for just $750. In coming months, other laptop makers will have their own models for $700 to $1,000.

Of course, hitting that price does require compromises. The Pavilion dv2 uses an old-fashioned hard drive instead of a fancy solid-state drive that stores data on flash memory chips. Hard drives are slower and heavier than chips, but in return, the dv2 packs 320 gigabytes of storage instead of the 128 GB on solid-state drives.

A Chip with Less Punch

Where HP really saved money is on the processor. And in doing so, it opened a new chapter in the long rivalry between giant Intel and its dogged challenger AMD (AMD). The Dell Latitude sports Intel's (INTC) ultralow-voltage Core 2 Duo chip, which costs $284 in quantities of 1,000. The dv2 is powered by AMD's Athlon Neo chip, which is believed to go for well under $100 (AMD doesn't disclose its pricing).

Because the AMD chip is a single processor, it provides less punch than Intel's two-core variety. But a computer's overall performance depends on both the main processor and the graphics processor. Intel integrates these functions in the microprocessor, while AMD compensates by adding extra graphics technology from its subsidiary, ATI. In the dv2, this combination delivers Blu-ray high-definition movies, something the laptop could not do if it relied on the processor alone.

The downside is that the processor and graphics adapter of the dv2 draw significantly more power than an Intel system, taking a toll on battery life. The dv2 got less than three hours on a charge—a mediocre showing. And unlike low-voltage Intel systems that I have used recently, the dv2 got a bit hot during extended use.

Despite these drawbacks, the dv2 is still a lot of laptop for the price. For most people, I think it represents greater value than any netbook. And whatever you call this new class of laptop—suggestions include "thinbook" and "affordable ultralight"—there are going to be more of them. This fall, AMD will offer a dual-processor version of its Neo chip with more efficient graphics, thus slashing power consumption and heat.

Intel Strikes Back

AMD has always been good at slipping into any seam Intel leaves exposed, but the chip giant is ready to strike back. It is already shipping cheaper Celeron low-voltage chips in Japan. And this summer, in time for the back-to-school season, it will offer a new line of Consumer Ultra Low Voltage processors targeted specifically at sub-$1,000 thin-and-light notebooks.

Then Intel will have to contend with other challenges, including graphics chips from Nvidia (NVDA). In a recent conversation, Nvidia CEO Jen-Hsun Huang declared: "The $1,000-plus notebook is over." The company is jazzing up netbooks with its Ion platform, which pairs Intel's bare-bones $40 Atom processor chip with a robust Nvidia graphics adapter. My prediction is that the Ion platform will prove Huang's point, leading to even more powerful executive-class notebooks with racy graphics, inexpensive microprocessors, and sub-$1,000 price tags.

The bottom line for mobility-minded buyers is that the need to choose between expensive executive ultralights and cheap but underpowered netbooks is nearly over. And what looks like the beginning of heated competition among chipmakers guarantees that the new breed of notebooks will get better and cost less—a happy outcome for fans of lightweight laptops.

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