RadioShack Offers $99 Acer Netbook

Acer, AT&T and RadioShack have teamed up to offer a deal that brings the Acer Aspire netbook to market for only $99. Netbooks are mobile computing devices with a screen size of five to 10 inches that run a full version of a client operating system, such as Windows XP or Linux.
The Acer Aspire, with integrated 3G wireless technology, usually sells for $500. AT&T is subsidizing the cost of the device, but customers have to sign up for a two-year AT&T DataConnect mobile-broadband service agreement. Plans start at $60 a month.

Netbooks Emerge in the U.S.

"Many people internationally are already enjoying the portability, on-the-go connectivity and affordability of this emerging new technology," said Peter Whitsett, RadioShack's executive vice president of merchandising. "We are proud to introduce this concept in the U.S. by offering a netbook with integrated 3G functionality in addition to full Wi-Fi capability."

Roger Kay, principal analyst at Endpoint Technologies Associates, called the Acer-AT&T collaboration a good deal for consumers. Netbooks, he confirmed, have taken off more quickly in Europe than in the U.S., but the timing is ripe for U.S. adoption.

"I expect to see a rising demand for netbooks over time," Kay said. "It's a development that's despite the recession. This market is rapidly attracting attention, and it's one of the growth spots; the problem is it comes at the expense of some notebooks."

Driving Netbook Demand

Netbooks, also called mini-notebooks, are on pace to reach 5.2 million units in 2008 and eight million units in 2009, according to Gartner. The market is expected to experience strong growth. There could be as many as 50 million mini-notebooks shipped in 2012.

Several factors will drive the demand for netbooks, including a small form factor and small screen, light weight, price, ease of use, and basic but sufficient PC functionality, according to Annette Jump, research director at Gartner.

"Mini-notebooks are likely to attract a variety of users with different usage scenarios: content consumption, Internet browsing, e-mail, instant messaging, keeping in touch with friends and family, storing and sharing pictures, and so on," Jump said. "Potential users are likely to include both first-time buyers seeking a low-cost introductory PC as well as experienced users seeking a low-cost second or third PC for themselves or a relative."

Will Netbooks Cannibalize Notebooks?

Addressing Kay's point, Gartner does not expect any major cannibalization of mobile PC shipments by mini-notebooks in 2008 and 2009 because there is a significant functionality and performance gap between notebooks and mini-notebooks.

That said, by 2010 it may be a different story. That's when Gartner predicts netbooks may start to cannibalize some low-end mobile PC volumes, and from 2011 they could significantly boost business PC shipments if their performance should increase substantially and they prove attractive to general business users.

"For consumer mini-notebooks to succeed, they need to be positioned differently than standard notebooks, and PC vendors will need to decide if the existing channels to market are appropriate and possibly look for new channels, such as telecom, gadget shops, and so on," Jump said. "PC vendors will have to convince retailers to take on those products, as they are still emerging products and potentially present some risk from an inventory point of view."

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