LG launched its ‘Netbook’ last week, Carphone Warehouse has been selling large numbers of its Webbook in recent months, and the networks are gearing up to launch their own-brand versions in what has been labelled a huge growth market.
LG’s Netbook could be a landmark device in taking laptops to the mass market. It is the PC equivalent of when mobile phones went from ugly brick-like devices to a mass-market consumer product in the late 1990s. The laptop is available in different colours and is thin and affordable. Meanwhile, Carphone is putting its faith on a shift from the household PC to personal laptops for individuals.
The industry has come a long way from when Vodafone launched the UK’s first 3G broadband USB dongle in November 2006. Now it’s the turn of the mini laptop, which both operators and retailers are bundling with mobile broadband contracts. If the pundits are right, all laptops will eventually be sold in the same way as mobile phones – subsidised in return for a lengthy contract.
1. Who’s going to buy them?
There’s a general consensus that laptop and mobile broadband bundles are initially being targeted at university undergraduates, followed by the Christmas season. A Carphone spokesman says that the latest mini-laptop PCs are ideally suited to young people who only really want a computer to communicate with their friends via social networks, email and instant messaging. Young people have less money to spend on a laptop so the entry-level, mini-laptop format suits them.
The spokesman adds: ‘It is strange how laptops are getting smaller these days, while smartphones – like the latest BlackBerry and the Apple iPhone are getting bigger.’
2. What is the market for these laptops?
Some observers are questioning whether there is a real market for mini laptops. In response to claims that it is just a fad, a 3 spokesman says: ‘There are a lot of unconnected laptops out there which we are naturally targeting with our dongles.’
Carphone draws parallels between the way mobile phones revolutionised voice telephony and what the retailer is hoping to achieve by offering low-cost laptops like its own-brand Webbook. In the early days, mobile phones took away the need for young people to talk to their friends on a landline. Carphone is hoping that by offering low-cost laptops, young people will be able to enjoy the same kind of privacy that mobile phones brought. The 3 spokesman adds: ‘There will be no more arguments about whose turn it is to use the PC.’
3. How small are they really?
Currently there’s no consensus on the terminology for these computers, which used to be called ‘sub-notebooks’ given that they’re smaller than an A4 notebook. Chip supplier Intel, which is pushing its Atom processor as the heart for such computers, uses the term ‘ultra-mobile PC’. Others prefer ‘mini laptop’, but Orange calls them ultra-compact PCs. Carphone’s Webbook, which is a typical example of this genre, is actually 10x6.5 inches. That’s just smaller than A4 size and much smaller than a typical laptop, which is around 14x12 inches.
Mini laptops also cost less than a typical laptop. They’re competitively priced at under £200, while Phones 4u’s normal-sized Fujitsu Siemens laptop is worth £349.99. Samsung’s R60 laptop is valued at £499.99.
The mini laptop derives its lower price from using the slightly less powerful Atom processor and by cutting out elements such as a DVD/CD drive.
However, some versions of the Webbook will run the Linux OS, which removes the cost of paying Microsoft for a Windows Vista licence.
4. When are the first ones available?
This sector emerged when the likes of Carphone started offering
consumers a ‘free’ Dell laptop in return for signing up to a fixed
broadband contract with AOL. From there it was only a short step for
the retailer to start offering laptops by the likes of Acer, Fujitsu
Siemens and Toshiba bundled with mobile broadband from Orange, T-Mobile
The Carphone spokesman is adamant that no particular ISP/broadband
supplier is pushed by staff. He claims that no incentives are being
offered to sales staff to promote TalkTalk rather than any other
supplier. ‘The objective is to give all broadband suppliers equal
pegging.’ However, the latest TV adverts for the Webbook feature 3’s
logo rather than Orange or T-Mobile.
Next, Phones 4u started offering laptops from Fujitsu Siemens and
Samsung, and has now added laptops from HP and Sony. The Fujitsu model
is available for free, while consumers have to pay £74.99 to get the
more sophisticated Samsung model. Phones 4u initially only offered
Orange mobile broadband but now also offers Vodafone and 3.
3 was the first operator to offer laptops and currently has three HP models in its range.
T-Mobile’s laptops are from Acer and Orange is offering Asus laptops.
It is difficult to find much difference in the way that all of these
suppliers – both retailers and operators – offer laptop and mobile
broadband bundles. 3 is offering an HP laptop with 150 texts for £30
per month, and Orange’s free Asus laptop is available for £25 per month
without any free texts. Most suppliers are tying their customers into
24-month agreements but Carphone offers some laptops with only an
18-month contract on 3.
5. Will they have embedded Sim cards or USB dongles?
There is an important distinction in this new market, which will become more obvious as time goes on. Currently, mobile broadband connectivity is provided through the simple device of plugging a USB modem into the side of the laptop.
The majority of bundles are using the popular 3G dongle from Huawei, but Orange has chosen to go with a rival product supplied by Belgium’s Option.
The next stage will be to move over to laptops which already have 3G capability built in (the so-called ‘embedded Sim’). Vodafone currently offers mobile broadband Sim cards, which can be used inside HP, Acer, Panasonic, Dell and now Lenovo laptops.
Alec Howard, Vodafone’s head of laptop connectivity, claims that laptops would not be sold in Vodafone stores. ‘All the hardware will be available through traditional IT channels, and we are currently working with IT partners on selling through traditional IT channels. We won’t be selling these laptops in Vodafone stores.’
Vodafone was unable to comment on when and if the operator would change its mind and start offering laptops with embedded Sims. However, Howard adds: ‘The USB modem has been successful because it’s easy. When it’s built in, it’s even easier.’
It was believed that some networks would try and have their own laptops ready for the start of the new student calendar but that has failed to materialise.
Carphone placed an initial order for 60,000 units with Elonex (manufacturer of its Webbook) and all the indications are that the operator will expand its range of own-brand mini laptops. The other operators and retailers are set to go down the own-brand laptop road, although currently no-one is admitting to it.
There are also clear signs that the subsidised mini laptop is here to stay. The 3 spokesman says: ‘It’s a model of payment that people are very familiar with, thanks to mobile phones.’
Carphone has previously said it wants to offer the broadest range of network suppliers it can with the broadest range of devices. The Carphone spokesman says: ‘No-one else has a large range [of broadband providers] in their stores.’
The industry expects market forces will push the likes of O2 and Virgin Mobile to offer laptop/broadband bundles – maybe even in time for the Christmas season.