big expensive laptop vs small cheap netbook - what difference does size make nowadays, if any?

Factual Questions
1

I went to Walmart and saw a $400 latest and greatest laptop with 4G RAM, Windows 7 and of the usual laptop size. Next to it was a $250 Acer “Aspire” netbook with “Windows Starter”, 1G of RAM, promise of 4 hours of battery time and wonderfully small size.

Ok, so I do understand that the smaller laptop means smaller screen, which means smaller power outlay and hence same hours of use for the smaller battery. That makes sense. I personally don’t consider big screens useful in any event.

But, the obvious price difference between the two gadgets makes me ask, what’s going on here? So Windows 7 costs more than Starter and 4G of RAM costs more than 1G of RAM. Maybe slightly smaller battery for smaller laptop costs slightly less. But, do these items really add up to $150 price difference? Or are there some underlying differences between how the big laptops are made / components they are made of vs the same for the Acer netbook, that I am ignorant about and am about to be enlightened by the pros, that cause so much difference?

Or could it be that $250 is just a rough approximation to the actual production cost of a modern laptop regardless of size whereas sales for more than that reflect expenditure on branding, marketing and American executive salaries? If so, why doesn’t Acer proceed to undercut Dell et al with cheaper laptops of the more usual big size as well?

2

Yes, the differences (what processors?) could easily add up to $150. Walmart cuts the prices to the bone and I wouldn’t be surprised if their actual cost difference was at least $140.

And I never though I’d see the day that a $400 laptop would be called big and expensive.

3

Take a look at TVs (or monitors). The bigger ones cost more. I suspect this is partly because the bigger the screen is (whether it’s a screen of a TV or of a laptop), the more expensive it is to manufacture (greater cost for materials), and partly because the bigger it is, the more people are willing to pay for it: they’d rather watch movies or football games or American Idol on a bigger screen than on a smaller one.

Another factor is that many full-size laptops come with CD/DVD drives; the smaller netbooks don’t. This is an important factor to some users.

4

the cheap Acer netbook likely uses an Intel Atom CPU, which is a mind-numbingly slow POS. The funny thing is, Atom- based systems are crappily slow at things like Flash, Javascript, and video files, which are all over the internet. don’t know how they get away with calling them “netbooks.”

5

That is a basic bare bones POS laptop. Still far more powerful than the netbook, but if you think that is even a mid range machine you are very mistaken.

The manufacturers cut ALOT of corners to make those price points.

6

Consider not just the smaller processor and memory size. The netbooks also do not come with any type of optical drive (DVD/CD). Most full size laptops have DVD RW standard. Hard drive size is also smaller in the minis and make sure you do note get a “solid state drive” I have seen nothing but trouble with them although they are supposedly faster and have no moving parts to drain the battery. Also I am guessing both have Windows 7, just one is the starter edition and the other a “higher” edition.

I actually own both a 17.5" laptop and a 10 inch Dell Mini. Both have different uses and I use both on a regular basis. Typing this note on the full size laptop in case you were wondering.

7

You are comparing the bottom of the line in one category to the least expensive laptop that can be made and still sell. It is amazing feat of supply chains and technology that either of them exist at their price. Believe me, that is the absolute cheapest that can be done now for a reasonable consumer product. You have to compare not only the costs of processors but types of plastic to make the case and even the internal connectors to squeeze any retail money out those margins. Look at tablet “computers” like an Ipad for a comparison. Their screens are very small yet Apple is said to be doing great because they got theirs down to the $500 mark while competitors are having serious trouble approaching that. What’s the problem? Its just some sand squeezed between sheets of plastic like an etch-a-sketch right?

In other laptop categories like higher-end office and gaming systems, the profit alone can be higher than the full retail value of either of those. I am not knocking the cheap ones. They work and they have their place but nobody is price-gouging because they feel like it at that level. You have to be uber-competitive just to put a product on Wal-Marts shelves and they still beat some of their vendors down so much they can’t do it anymore.

8

Here’s another difference in cost: Windows 7 Starter (available only from OEM and only for “Netbooks”) costs about $10 per license which is about $100 cheaper than Windows Home Premium.

Microsoft created Windows 7 Starter specifically for the Netbook market because Netbook manufactures were using free Linux instead of paying around $100 for Windows Home Premium.

Windows 7 Starter is purposefully hobbled in hopes to get you to buy the full version of Windows 7. For example, you can’t change the wallpaper, install custom themes, or change any sounds. You can’t run dual monitor or have DVD playback. You also cannot switch between user accounts without logging off. Originally, Microsoft hoped to hobble Windows Starter even more (no more than three running programs at a time), but the manufacturers balked – and threaten to switch back to Linux.

MY experience has been that Windows 7 Starter is good enough for netbooks and it’s not worth upgrading to Windows 7 Home Premium.

The $250 difference is mainly due to the processor, memory, and the upgrade to Windows 7 Home Premium. I haven’t looked at OEM prices for a while, but it wouldn’t surprise me if Windows 7 Home Premium is the most expensive “part” of a PC.

The price difference for a smaller screen and other smaller components is not significant. Compare the price difference between the 9" iPad and the 7" Samsung Galaxy Tab S. Both are more or less the same price. (The Galaxy, in fact, is actually more expensive).

9

To me I’d say the biggest drawback of that particular netbook iswindows 7 starter. My sister has the same netbook and finds it fine, but she doesn’t do anything much more than surf the net and word process. Btw not sure its mentioned in the article but you can’t change the default background in win7starter, you need to download a 3rd party program to do it.

10

Part of it depends on what you do with it. How much of the power and speed of my desktop do you think I am using to post this? I seldom notice too much delay on the net even though I am so cheap I am using Earthlink’s 768 K service. I figure much of the delays I encounter are downloading from over loaded servers. If it was my poky system, would it sometimes take 10 times as long for a page to load?

I have an EEEPC net book. I hate its mini keyboard and touch pad. I also use a Sony Viao laptop sometiems. It is little better.

As far as storage goes. those like me that don’t trust the cloud can buy inexpensive USB sticks or SD cards. Shop around and $10 will get you 4 gigs. That will hold a ton of anything except perhaps video.

11

what I like about this post is that it has at least some numbers to ponder. Clarification question - does Windows 7 Home OEM volume license (not sure of the name, whatever license that EMachines/Dell pays for to install on new machines) really cost $100? Well, on Amazon these disks retail for around $170, but is $100 really the lowest that the OEM could manage to push the price down?

Incidentally, so if the latest and greatest Windows is so expensive even for OEM, why isn’t Acer selling equivalents of these $400 laptops for $300 with Ubuntu as the OS? Or, for that matter, why isn’t it selling laptops with the cheaper Windows Starter but with the higher quality, more expensive processor?

12

Windows 7 Home OEM is $99 at NewEgg. It was $79 with an additional $10 rebate when I bought it on Black Friday.

13

You are pondering numbers about a whole system of marketing and supply chains you know little about. They aren’t selling Linux based netbooks in Wal-Mart because people that want a netbook but also know Linux don’t get their from computers from Wal-Mart. I am not trying be be too hard on your question but few people understand what it takes for a product to make it from conception to a space on the shelves at a mega-store. It is big bucks and you place your bets with what will sell. People that run Windows Starter aren’t the ones that care about performance or they wouldn’t be buying a netbook. All of that is well outside of the niche. Such products could exist of course in a universe where all choices were available but they don’t here.

There is a place for supercheap netbooks running Linux in the 3rd world and there are examples of those being built. Some people have built sub $100 laptops powered by hand cranks for areas that don’t have reliable power. If price is the only consideration, why don’t you try to find a way to get one of those? Probably because it doesn’t match well on your personal price/utility model. It is the same answer for all of them when trying to match products to target consumers anywhere in the retail world.

14

I have a netbook (HP Mini) and it’s great for what I want to use it for: mobile internet access.

I set it up to dual-boot, Windows 7 Starter and Ubuntu 10.10.

Starter is fine, if I gave a damn about changing the background I’d do it, but, seriously, who cares? Is it that much of an issue? That hardly makes it “crippleware”. I don’t tend to sit staring at the desktop anyway, I look at webpages. I have a Windows 7 DVD, but I don’t feel the need to upgrade because I don’t actually need the extra things that full W7 does.

I use Ubuntu more than W7S on the computer because I’m enjoying learning about Linux and I feel it’s about time I did that and Ubuntu is a relatively painless way to do it. My netbook has a dual core N550 Atom processor, which is no doubt better than the single core Atoms, and it runs well.

The point of netbooks is extreme portability. They’re light and small, but they’re powerful enough to get the full internet experience. I did upgrade to 2GB of RAM, which I’d say is a must, but apart from that, the thing works well at what I want it for. If I need to do anything more, I use my desktop computer. I don’t really need to do anything intensive while travelling.

I have the two computers networked, and it’s easy - even with one running Ubuntu and the other running XP3 - to send things back and forth between the computers, or to use USB drives, so I don’t really need to have an optical drive on the netbook.

I don’t want to watch movies on the netbook, but I’ve tested it and it plays AVIs with no problems.

If you need a portable computer that can do lots of things, it’ll cost you. If you want a very portable computer that can do the internet and basic things, a netbook is a better choice.

ETA: I also got a Logitech wireless mouse for $20, which solves the touchpad problem.

15

OEM license prices vary from vendor to vendor with favored vendors being able to get cheaper prices. Since these are private contracts, it’s hard to say what the manufacturer actually pays. However, people I know in the manufacturing business told me it is somewhere between $80 to $120 per machine for Windows Home Premium – at least the last time I checked with them a littler over a year ago. It may have dropped since then.

Part of OEM pricing has to do with whether all PCs manufactured will be licensed for Windows – even for machines that don’t have Windows installed on them. So, if you buy a Dell or HP PC with Linux, you’re still paying for the Windows licensing fee.

Why isn’t Acer selling $400 laptops for only $300 sans Windows? Probably because its licensing deals with Microsoft makes it pay a Windows licensing fee whether or not that PC actually has Windows on it.

Several manufacturers have tried to sell Linux based PCs at deep discounts. Several years ago, Walmart sold a Linux PC for around $200 which came with Linux. A lot of geeks bought it, but most of the regular customers who bought it strictly on price were very unhappy with it. Linux isn’t really a consumer ready desktop system quite yet. There’s just too many rough edges. The biggest issue is that software that the users wanted to run wouldn’t run on these boxes. You can’t get Microsoft Office for Linux.

Netbooks were a more serious threat to Windows. People used the netbooks differently. You took them to the local coffee shop to browse the web, post to Facebook or update your blog. No need to run Microsoft Office. The original netbooks by Asus Eee PC were all Linux based. In fact, Asus went through a corporate restructuring, so it could sell Asus Eee PCs with Linus without paying for a Windows OEM license.

For a while, there was a war 'o words between Microsoft and the manufacturers who wanted to get in on this Netbooks boom. Manufacturers said these weren’t PCs and thus were exempt from the license. Microsoft disagreed. Dell even threatened to replace their “Every PC is licensed for Windows” agreements. After all, its Linux server market was doing quite well.

The cheap Windows 7 Starter license was an attempt to prevent manufacturers from leaving the Windows fold. And, it worked. Almost all netbooks now have Windows 7 Starter on them. What hasn’t worked for Microsoft is getting users to upgrade to Windows Home Premium. Users don’t want to pay the $80 just to be able to change Windows backgrounds and to have the new Areo look.

Even worse for Microsoft, the market for netbooks has dropped off sharply since the iPad’s introduction. No matter what you think of Apple or the iPad, the iPad has decimated the netbook market and has even hit the laptop market quite hard. Many manufacturers are now looking into building similar tablet computers. HP bought Palm for its WebOS. Many others are using Android which has no licensing fee.

16

Last I heard, you can still buy Linux computers at www.walmart.com And I have to agree, Linux still isn’t ready for prime time. Note, I haven’t used much else since I gave up my Power Mac.

17

the question is not why I don’t find Ubuntu laptop or Windows Starter more powerful laptop in the megastore in question. The question is, where do I go online to buy both of those gadgets with appropriately high hardware parameters for the low prices that could be expected based on such estimates? If there is a $400 laptop with Windows 7 in Walmart, it logically follows that a $300 laptop with Ubuntu or $340 laptop with Windows Starter should be well within reach of mankind in this year of grace 2011.

reductio ad absurdum and appeal to ridicule fallacies, right? Some 3rd world people live in grass huts in the jungle, but is that a reason not to wonder about availability of low cost housing in America?

18

Not yet mentioned is the fact that netbooks (at least the Aspire One of the OP, which is what I am typing this post on) do not have a CD drive, much less a DVD player or heaven forbid a burner. The A1 has a web cam, but strangely, no microphone. It came with only 1/2 Gig of ram.

The small screen and slow CPU also mean that reasonable run time comes from a smaller cheaper battery, which also needs a cheaper PS to recharge it.

So 5 bucks here, 10 there, 2 somewhere else, rinse, repeat, and you end up with something you can sell for $200 less and still have some profit.

As for mindnumbingly slow ATOM cpu, I have never found an internet connection that was not the bottleneck for what a netbook is intended for and good for.

19

I wouldn’t put a nickel or gram into a CD or DVD drive or burner in a notebook. If I need to get data to or from one, I would use an SD card or USB stick and my desktop. CD’s continue to come with driver for hardware, but usually you have to download upgrades, so why mess with a CD?

20

I think there is some confusion. Companies like Dell and HP don’t pay the OEM price they are paying Royalty OEM price. I don’t think there is a published price list, but I seem to recall seeing $50 some place. I just found it.

http://arstechnica.com/microsoft/news/2009/09/microsoft-oems-pay-about-50-for-each-copy-of-windows.ars

That was $50 on a $1000 PC. The implication was that it would be less on a $400 PC. So figure from $20 to $50 for the windows license.