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7/28/2008
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Gartner Predicts $100 Notebook Will Take Years To Achieve

The research firm says the industry also needs to answer questions on power availability and the cost and availability of Internet connections.

The $100 notebook computer, a goal set by the IT industry and academics to get a PC in the hands of schoolchildren in developing nations, is unlikely to hit the market in the next two to three years, a market research firm said Monday.

In addition, Gartner warned that companies too focused on breaking the $100 barrier might fail to address important issues surrounding low-cost 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," Gartner researcher Annette Jump said in a statement.

Those "open questions" include power availability and the cost and availability of Internet connections, Jump said. In addition, some type of financing and payment options would have to be available in emerging markets where there are large numbers of poor residents.

While the price of mini-notebooks is unlikely to drop to $100, declining component prices and increased demand could reduce prices by 10% to 15% in the next two to three years, Gartner said. Prices are unlikely to drop further because packaging, assembly, and software costs are expected to remain the same.

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, have provided insight into other obstacles that need to be overcome besides price. They include planning and training for teachers and students, content development in line with the local school curriculum, the correct interface for schoolchildren, and the permanent availability of technical support.

Mini-notebooks in developed nations are making their way to the consumer and education markets. Business, however, has not been buying up the low-cost machines, which don't provide the security and other features needed in a corporate environment.

To drive more sales among consumers and businesses, vendors need to position mini-notebooks not as a computing device, but as a "window into the Internet," Gartner said.

Mini-notebooks have keyboards that are too small for adults to create long documents. Typically less than 10 inches, the ultraportables are more practical as devices for accessing the Web and checking e-mail. Outside of the education sector, people in developed countries are expected to use the inexpensive laptops as second computers.

Market researcher IDC predicts that worldwide shipments of mini-notebooks will grow from less than 500,000 units last year to more than 9 million in 2012. Because of low average selling prices, revenue will be less than $3 billion.

As a percentage of the total consumer PC market, the devices will remain at less than 5% through the forecast period, IDC said. However, the notebooks could eventually capture more than a third of the education market by 2012.

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