$100 Laptop Three Years Away ?

July 30, 2008

The $100 laptop will not be a realistic target for the next three years. Analysts said that while education was the initial target audience for low-cost mini-notebooks, all current versions cost notably more than $100 and prices are unlikely to fall significantly during the next two to three years.

Gartner warned that while it is important that prices continue to come down, companies that become too focused on breaking the $100 barrier could be distracted from addressing other issues surrounding mini-notebooks.

“The economic benefits of IT literacy in emerging markets are currently driving the push for the $100 PC but there are many open questions that remain,” said Annette Jump, research director at Gartner. “These include determining the relevant hardware specifications, power availability, availability and cost of Internet connection, as well as providing adequate finance and payment options for emerging markets where funds may well be extremely limited.”

Ms. Jump said that while Gartner believes that increased demand for the devices, along with declining component prices, could potentially reduce prices by 10 percent to 15 percent in the next two to three years; packaging, assembly and software costs are likely to remain the same.

There have been pilot deployments of mini-notebooks in the education sector in a number of emerging markets, including parts of Africa, South America, the Indian subcontinent, the Far East and Eastern Europe. Early lessons learned from these deployments include the importance of financial provisions beyond hardware; planning and training for teachers and students alike; content development in line with the local school curriculum; the appropriate interface and experience suitable for schoolchildren; and permanent availability of technical support.

Beyond the education sector, mini-notebooks are expanding among consumers, but mini-notebooks business users are also some way off. Gartner believes that for mini-notebooks to be accepted and succeed in the consumer and business segments, they must be positioned not as a computing device but as a window into the Internet and a way for people to work, play, learn, record, report and communicate in any way they choose. Gartner predicts that these devices will proliferate into both emerging and developed economies, among both consumer and business users.

“We expect to see increased product innovation in the PC market during the next few years,” said Ms. Jump. “Mini-notebooks will create opportunities to reach many buyers across all regions, both in mature markets as additional devices, and in emerging markets as PCs.”