Falling Prices

Posted on August 22, 2008

Watch out for falling prices…they’re dropping fast and furious.

Specifically, I’m talking about notebook prices. Actually, netbook prices.

A netbook is what it says, a notebook primarily used for Internet surfing, not a real computing powerhouse but a unit that holds up well to the lower processor demanding task of surfing.

Acer just announced it is cutting the price of its Aspire netbook by $50, that means a new price of $349. They are also cutting the price of the Linpus Linux Lite, to $329 from $379.

Analysts believe this is just the early salvo being fired in a market that’s ready to tumble.The Intel Developer’s Conference, which just took place, featured dozens and dozens of netbooks. The computer makers saw for the first time just how many competitors they have, so it’s expected they will be slashing each other up between now and the holidays trying to gain some sort of market share.

Markets are interesting as all manufacturers, obviously, would like to keep prices high. Ultimately, the only way to do that is by price collusion. So, the moment one company drops their price a bit, someone else will try to outdo them.And then here we go. We could use a little of that with gasoline!

The category threatens to upset some computer stalwarts – from Microsoft to Hewlett-Packard – because they don’t require the powerful on-board software and hardware that have driven marketing and sales in the past.

Intel says it is welcoming the category because it sees an opportunity to help drive a new market. That means bucks.

Where are we headed? As far as consumers are concerned, there is a lot of indication that prices may fall as low as $299 on a regular basis, and might well drop by the holidays to $249.

Nice…