Product Chosen: HP Mini-Netbook Price: $279 Photo:
Figure 1 - Product Features: Source - Bestbuy.com
Intel® Atom™ processor N270 2 high-speed USB 2.0 ports
Features a 533MHz frontside bus, 512KB L2 cache and 1.6GHz For fast digital video, audio and data transfer.
processor speed. Built-in high-speed wireless LAN (802.11b/g)
1GB DDR2 memory So you can easily connect to your local area network or a wireless
For multitasking power. hotspot.
Note: Optical drive not included Built-in 10/100Base-T Ethernet LAN with RJ-45 connector
Optional external DVD-ROM drive available (not included). Connects you easily to the Internet.
8.9" LED antiglare widescreen display with 1024 x 600 Weighs 2.5 lbs. and measures just 1" thin
resolution For lightweight portability.
For a clear view of your movies and graphics. Microsoft Windows XP Home Edition operating system
16GB solid state drive With Service Pack 3 (SP3) preinstalled for a stable operating
Provides plenty of storage space and fast read/write times. platform.
Intel® Graphics Media Accelerator 950 Software package included
With 128MB total available graphics memory for lush images. With Microsoft Works, Adobe Acrobat Reader and more.
Built-in HP webcam ENERGY STAR compliance
Makes it easy to chat with and send video mail to family and friends. Assures a high standard of energy efficiency.
Memory card slot Intel, Pentium, Celeron, Centrino, Core, Viiv, Intel Inside and the Intel Inside logo
Supports Secure Digital and MultiMediaCard formats and lets you are trademarks or registered trademarks of Intel Corporation or its subsidiaries in
the United States and other countries.
easily transfer digital photos from your digital camera
Netbooks Defined: Netbooks are highly portable, low-cost devises that provide general
computing and web-based services. Generally they are light weight, weighing in-between two
and six pounds and have screen sizes from five to thirteen inches. They can easily fit into a large
purse or briefcase and are designed to bridge the portability of a PDA with the functionality of a
laptop. Most use the Intel Atom processor; however there are many competing processors.
Microsoft dominates the market with at least ninety percent of netbooks using its operating
system. Netbooks so far lack optical scanners for reading and writing CDs and DVDs. This
product is considered high-tech due to the high nature of market and technical uncertainty as
well as high competitor volatility.
Market Uncertainty: Netbooks have been a boon in computer sales in 2009; however
consumers are experiencing much confusion over what exactly they are buying. Notebooks and
Netbooks sound almost identical; they look similar and perform similar functions. According to
the research firm Garter, shipment of netbooks will rise by fifty percent to just under eight
million units in 2009. Forty-one percent of customer bought netbooks because of the lower price.
However, according to another study by the NPD group only fifty-eight percent of customers
who initially intending to purchase a notebook before purchasing a netbook instead are satisfied.
Seventy-percent of those that initially intended to purchase a netbook from the start are satisfied.
While that is a large percentage difference, that still leaves thirty percent as unsatisfied. Nearly
sixty-percent netbooks owners surveyed said they bought their netbooks for portability; yet over
sixty-percent responded that they only use it at home. Though how many of those possibly use it
for portability around the house needs further research.
Figure 2 Source: The NPD Group/Netbooks II: A Closer Look
One reason for this seeming contradiction may be the weak economy in 2008 and 2009. Many
shoppers may have been in the market for a notebook, but purchased a netbook due to its lower
price while not realizing the loss of functionality. While some forecasters predict a huge growth
in sales of netbooks, unless the right target consumer is reached, sales may decline when the
economy recovers and customers’ needs change and purchasing power improves.
Some consumers seemed to be confused about what type of technology they actually want of
need. Some may actually want a PDA or a smart-phone and a netbook may fit the bill as a super
PDA or even a smart-phone for making calls over the net. Others are looking for a full fledged
computer and others are looking for a portable device to be compatible with their full fledged
computers. Elementary schools looking for low cost computers may find netbooks are a perfect
fit for children; whose needs are more basic and which the student’s smaller hands work well
with the smaller keyboard. For all of these customers, marketing needs to be specific to the
customer’s actual needs.
In addition, there is the worry that as industry configuration standards change something new
and better may come along. The next waves of netbooks are likely to have longer battery life,
larger screens and keyboards. Also the battle over solid-state drives and hard drives is sure to
Technological Uncertainty: One of the factors that allow manufactures to produce netbooks at a
substantially lower cost is the type of processors netbooks use. Most use the Intel Atom
processor, which consumes must less energy allowing the netbook to have a longer battery life
(Gomes). These processors consume less than ten watts of power or only ten percent of the
power of the Intel Pentium processor. The trade off is that there is much less power to process
complex tasks or multiple tasks on the computer. Consumers who want to run high-tech games
or even browse the web with more than three tabs open may become frustrated.
Consumers that have purchased their netbooks with Microsoft Office pre-installed may be in for
a shock. The netbooks only come with a sixty-day trial and will require an additional two-
hundred dollars and up for an activation key. For some consumers, this will mean they will have
spent twice as much as they originally intended and not have the power run it as smoothly on a
notebook. Microsoft will have to contend with competing platforms and software and consumers
will have to wade through choices such as Open Office and Google. Apple is contending with
the problem that it doesn’t want its Leopard system running on netbooks and competing with its
Macbook Air. Apple forced Wired.com to remove an instructional video on how to install its
MacOS on netbooks (Garfinkle). Vendors will need to contend with which operating system
works best on netbooks. If that is not Microsoft, they will have to contend with the majority of
users who are accustomed to their OS and office software. If consumers demand the new
Windows 7 OS from Microsoft when it is available, manufactures may find the higher licensing
fees along consumer expectation of a lower price may cut into their profit margins.
In addition, netbooks run off of older technology than netbooks. According to Howard Locker,
director of new technology at Lenovo “From a processing and graphics view-point, they
(netbooks) are from 2005 (four years ago). But……you can go with four-year old technology
and its good enough for most users.” (Garfinkle) This may be true for applications running on
cloud technology; however this may worry some consumers that their netbooks will run new
applications two years from purchase when the technology is already four years outdated.
Consumers may also be unwilling to pay for extended warranties for their low cost net-books
and be concerned over who will provide service in case problems arise.
Competitive Volatility: There are many competitors in the netbook market including Dell,
Hewlett-Packard, Lenovo and the list goes on. Just the same as the PC market, many software
providers are battling to provide software and the operating system such as Google, Microsoft
and open software such as Linux. Currently Microsoft dominates the market with over ninety-
percent of the netbook market. However, just as we have seen in the smart-phone and PDA
market, this can change rapidly; sometimes overnight.
In addition to competition between netbook manufactures and suppliers, netbooks will also
compete with PDAs and smart-phones for those looking for a mobile device. Netbooks
manufactures will also be competing with themselves against their own notebooks and PCs. This
will cannibalize sales of notebooks and may even lower revenue since the profit margin on
netbooks is smaller, unless the volume of sales makes up the difference. Manufactures will need
to consider cannibalizing their sales or loosing sales all together by staying out of the market.
Product Observations: I chose to observe at Best Buy on a Sunday afternoon Oct. 3rd 2009
between 3:00 p.m. to 4:30 p.m. This time was chosen because it was a weekend when most
individuals would be off work and available to shop with friends and family. Additionally, it
was a clear weather day when individuals would be willing to venture out.
• Consumers almost always came in a male-female two-person team to view the product.
• Some also came as a small group of three to four people. In one hours time, only a couple
individuals browsed by themselves.
• Women asked more questions than men.
• Men tended to explain more to women’s questions and asked fewer questions.
• Individuals squinted at the screen.
• Individuals’ nose crinkled when reading technical specs.
• Individuals always tried out the keyboard and compared with other netbooks.
• Individuals spent more time typing on the keyboard regardless of the program than any other
• Individuals spent a lot of time, on average of thirty to forty minutes wandering from netbook to
netbook examining each.
• Men would pick up the netbook and pretend to carry it in one hand.
• Men would test the weight in their palm.
• Those who were professionally dressed mainly focused typing in word documents and excel
• Those observed to dress as though they made a moderate to high income always tried out the
keyboard while typing in a word document.
• Those who appeared as possibly earning a lower income tried surfing the net more often.
• One handicapped individual browsed the netbooks.
• Women kept pulling their husbands/boyfriends to a competing netbook that was pink stating
that it was cute. The men on the other hand seemed more turned off by it.
• A couple of individuals were overheard saying it would be good for their moms.
• Dell had a netbook with a pink psychedelic cover which individuals would pick up and feel and
tap in a move that seemed to try to gauge the quality of the materials.
• No one made a purchase in the hour of observation.
Analysis of Observations:
Purchasing a netbook is a high-involvement decision for most consumers. The bulk of those
observed spent a half-hour or more considering their options. Most consumers lacking
knowledge about computers wanted input and assurance from a personal source of reference
such as a family member, spouse etc. Most did not ask the representatives for help even though
they were available indicating that they put personal sources of references above unknown
experts were no trust has been previously built. Even though many individuals were making
frustrated expressions when reading the technical specs of the product indicating they were not
familiar with what they were reading. Even after spending a good amount of time, no one made
a purchase indicating they felt they still needed more information before purchasing.
Those who seemed better dressed (my own opinion only) or who were professionally dressed
seemed to have a better comprehension of netbooks. They mainly focused on the functional
programs. For those consumers, the main concern appeared to be portability, ease of typing and
the readability of the screen. For men, the size of the keyboard appeared to be more important as
they had larger hands. While women were attracted to the pure pink keyboard of a competitors’,
men quickly pulled them back from that indicating that while women were attracted to that
attribute, men are the ultimate decision makers for buying a netbook.
Those who appeared to be earning a lower income seemed more confused. While everyone tried
out multiple computers, those earning a higher income seemed to bounce more from netbook to
netbook, while those earning a lower income bounced more from all netbooks and notebooks
indicating they were trying to comprehend the difference. They looked more baffled while
reading the specs and they spent less time doing so. They focused more on surfing the net and
applications for personal use than business or educational uses. They handled the netbook less
indicating they were more concerned with price than portability. Even though he was not
shopping by himself, the handicapped individual in a wheelchair did not pick up the netbook
book to feel and weigh it; indicating he also was more concerned with price rather than
Solutions: Stores should have in-store displays promoting netbooks as a companion device to
larger P.C., but not as a replacement. Features should focus on portability battery life, wireless
communication and satisfying basic functional needs such world processing, email, calendar and
staying connected with the office. In-store displays should target the different educational uses
for young children as a first computer and for college students as companion device for their
• Linear Qualities • Must Be Qualities
Battery Life Portable
Size of Keyboard Light weight
Size of Screen Wireless connection
Bandwidth USB ports
Length of trial period for MS Compatible with other
Quick boot up time
Power of processor
• Attractive Wow Qualities
Free car dashboard mount for use with GPS
Expands in size when opening up, shrinks upon closing
Twistable handwriting tablet with touch-screen capabilities like an iPod.
Able to play music or movies in the closed position so consumers can use while resting
on an airplane. (or read electronic books)
Wireless synchronization with home or business computers, PDA’s and smart-phones no
matter where the consumer is located
Biometric Security such as an retina scanner
3G port built in
Unbreakable and waterproof: i.e. you can throw it at a wall, drop in the toilet or work
outside in a rainstorm and it will still work
Follow up research: Hewlett Packard should first do surveys to find out if consumers are
interested in these features and then hold focus groups to understand how customers actually
respond to the features. After which, Hewlett Packard should then offer beta-testing by offering
professional consumers the opportunity to use the netbook on the road with wireless service
included and report back to Hewlett Packard and also blog about their experiences about it.
(Much like the Palm Pre)
Garfinkle, Simon Technology Review; May/Jun2009, Vol. 112 Issue 3, p74-76, 3p, 1 color Last accessed Oct 13,
2009 at URL: http://0-earch.ebscohost.com.opac.sfsu.edu/login.aspx?
Anonymous The NPD Group/Netbooks II: A Closer Look, Last accessed Oct 13 2009 at URL
Gnomes, Randall , Computing, So, Why would I want a notebook. Last accessed Oct 13, 2009 at