Originally Posted by melgross
Realistically, profits matter highly. If you read that Bloomberg report, you'll see that Acer themselves aren't happy about the situation.
But PC companies have gotten themselves stuck in this low price spiral, which is what it is.
The companies are concerned about netbooks, not because they don't know what to do with them, but because they see their customers abandoning more highly priced, and profitable machines.
Competition is good, but it has its bad side as well.
Consumers want lower prices, but they don't always understand the downside to lower pricing.
Netbooks have problems running any but the simplest programs. I can attest to that. The industry got themselves into a bind here. Netbooks were at first thought to be a solution for people who couldn't afford even the cheap $500 laptops that were already draining the companies profits.
But people who could afford the more expensive machines, and who would have bought them, are now buying netbooks. A lot of people aren't that happy with them, and have returned them, but most find them to be enough.
What I do find interesting is that the first netbooks almost all came with some version of linux. Netbooks were thought to be understood by those buying them to be mostly for running net related apps. But no. People wanted to run their regular apps.
So the Linux books went back in droves.
This was the best chance EVER for desktop (or laptop) Linux to gain a stronghold, and it failed big time.
Manufacturers REALLY wanted to sell Linux machines so that they wouldn't have to pay MS the $15 for the OS. Now, the 7 Starter equivalent will cost them almost $50, from what MS is saying.
How are they going to sell $200 to $400 machines when the OS is almost $50?
Apple will be coming out with somewhat less expensive machines soon. They don't have to match netbook pricing, or even come close. They just have to move down somewhat, and they will snare more people.