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The Sub-$1000 Opportunity?

The Sub-$1000 Opportunity?

  • Comments 7

U.S. $1000 bill

Here’s a thought experiment: the fact that Windows pretty much owns the sub-$1000 computer market is in fact an opportunity. Discuss.

(This article appears with slightly different wording – to try things from a different perspective -- on my personal tech blog, Global Nerdy.)

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  • This morning I read in an article that Mac owns 90% of the >$1000 laptop market.  Wow.  I do not know how accurate that figure is, but let's consider for the time being that it is.  As I type this response on a lapton that cost in excess of $3000 and is running Windows I was shocked to hear it; then I gave it some thought:

    1. The vast majority of computer users' needs are very simple, and do not require more than the simplest hardware available.  In turn most of those laptops run Windows (my netbook came with Ubuntu Linux and has since had Windows 7 deployed to it).  

    2. The cost of PCs that run Windows have dropped dramatically while increasing in functionality.  Because of that I would posit that the vast majority of laptops purchased cost less than $1000.  Whereas a few years ago even the most basic laptop cost well over $1000, I would bet that the VAST majority now cost less.

    3. The numbers actually don't account for installed OS, but rather sold OS.  I admit that I considered buying a Mac laptop in May... and opted for a Windows one because even the highest end Mac did not have the power that I need.  Having said that had I bought a Mac I would have promptly installed Windows.

    I am glad that Mac is doing well, although I expect that some of that is on the back of misleading ad campaigns.  I suspect that Microsoft's recent campaign struck a cord with potential shoppers... sure the Mac LOOKS cool but do they need to spend the money?  We'll see... In the meantime Windows still has nearly 90% of the total market... so Mac still has a way to go!

  • Well, that leaves companies open to the other markets, but thats obvious.  A company could try and win the sub-$1000 market away from Microsoft, but that is really fricken hard to do and costs lots of money to accomplish.  In doing this though, it creates competition, which will cause the companies to create better products.  This is definitely a good thing.  The downside of that is there will be more than one defacto system to buy, which creates buyer confusion and thats never good.

    I think the question is too simplified to really discuss.  It's too vague.  Please elaborate.

  • Hey, Steve!

    I purposely left the question a little vague and open-ended so as not to steer the disucssion in any director and to let people "fill in the blanks" themselves. Let's see if this post gets some more comments, and then I'll chime in.

  • Okay -- *ONE* teensy clarification: By "opportunity", I mean "opportunity for DEVELOPERS".

  • Developers!  There we go!  Huge opportunity.  With a low cost OS, applications can be simple and cheap/cost effective, because people won't think they are getting "ripped off" when comparing costs.  When you have low cost applications, its quite likely there will be bajillions (read many) of other low cost applications that do the same-ish thing.  Going back to my first comment, this creates competition, which creates better products.  

    In this economy (or any economy for that matter) the bulk majority of people aren't wanting to spend a lot of money on new systems.  It's not in the budget.  A few people can afford to buy a macbook on the theory that it's better quality, and will last longer.  I call phooey on that.  Buying a macbook just means you'll have a higher chance of getting it stolen.

    One question that wasn't asked, was how many laptops are sold that cost > $1000?  Is it 50/50?  I doubt it.

    What developers need to ask themselves is, which side of the fence will have more units sold?  Then go there.  I'd wager there are more sub-$1000 laptops sold than > $1000 sold.

    You could also ask, which system is easier to develop on.  Windows, obviously.  Which is cheaper to develop on?  Windows, obviously.  Which will have the greatest reach?  Windows, OBVIOUSLY! :)

  • Steve: That was along the lines of what I was thinking, looking at examples like:

    - What happened in the UK when postage rates changed from being based on distance to a simple and low flat rate: a boom in letter writing

    - What happened when airfares became something that everyone could afford: all sorts of interesting socio-cultural changes

    - What happened when broadband became affordable enough to sell to consumers: a boom in high-bandwidth internet services

    As for laptop sales, I'm not sure of what the number are, but Steve Jobs and others have been pointing out that laptop sales have been exceeding desktop sales for some time now (NPD reported this way back in July 2003 -- see http://www.geek.com/articles/chips/laptop-sales-exceeded-desktop-sales-in-may-2003073/).

  • Question: How many macs are available for less than$1000? I have a feeling that if this number was more than 0, the windows monopoly on low cost laptops would dwindle greatly.

    So now, there's just windows and unix-like OSes for under a grand, and we all know how hard it is to get manufacturers to provide alternative OSes on their hardware.

    It's a lot like being the only car dealership in town and saying you sell over 90% of the cars in town.

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