$100 Laptop Underscores a Critical Industry Misunderstanding (UPDATED)

Last Updated Jul 29, 2008 6:23 PM EDT

Join Tech $99 laptopThe hundred dollar laptop? A dream for at least three more years, says Gartner. But it turns out there is a $99 laptop from Join Tech in Hong Kong, based on Windows CE. (Because it's under a c-note, does that technically make Gartner right?) And apparently India is pursuing a $10 laptop. (UPDATE: Apparently someone miscalculated and it's another $100 laptop.) Did some Gartner analyst forget to do a web search before going to press? Nope, it's a matter of definition, and the difference between calling one machine a "laptop" and denying the label to another underlies a major mistake the industry makes that is probably costing it lots of money.
Gartner warned that while it is important that prices continue to come down, companies that become too focused on breaking the $100 barrier could be distracted from addressing other issues surrounding 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," said Annette Jump, research director at Gartner. "These include determining the relevant hardware specifications, power availability, availability and cost of Internet connection, as well as providing adequate finance and payment options for emerging markets where funds may well be extremely limited."
That's code for "laptop as we've always thought of it," meaning something that could run XP (Vista -- sorry for the parapraxis), Leopard, or one of the Linux flavors; e.g., a regular personal computer compressed to fit something easily portable.

But it's a mistake to define the category by vendor whims and not buyer needs. Why can't a "real" laptop be one that has readers for common apps, includes a more simple word processor, some networking, and an email program? So what if the silicon is lean and mean, or at least cranky?

To maximize profit, you give people want they want. Some are probably looking for that simple and light machine with long battery life. Others might seek a slightly more powerful version. If the price were right, many people would probably get a full laptop and then something small and cheap for all those times they don't need to run big apps. (Hand raised here.) The total market opportunity is likely larger than the perceived one for conventional laptops. But to go after that bigger pie -- maybe with a combination pair of machines for all your needs -- the vendors would have to stop thinking about how they want to do business and focus on how their customers do. For many tech companies, the gap between those two stances is a chasm.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.