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ULCPCs: Not Just for Economic Downturn

The first modern netbook produced was Asus Eee PC back in August ’07 and it took a year and the global economic recession for the category to become significant. But are the ULCPCs just a temporary solution during the slowdown? It seems like silicon developers do not think so.

“These affordable devices really represent a new category of computing and aren’t just a flash in the pan for the recession. People have shown they want, and need, simple Internet-centric devices and there is still room to grow the market especially in emerging markets,” explained Bill Calder from Intel.

OLPC XO with AMD Geode inside. The world's most-known ultra low-cost PC

Anyway, with advanced graphics or not, personal computers – whether they are netbooks, nettops or smartbooks – based on Intel Atom hardly represent good performers for demanding applications. In fact, some industry insiders believe that the main target audience for ULCPCs are women and youth, people who are not fixated on productivity, but lead an active life with a lot of communications (including the various social networks) and in need of advanced multimedia features (in order to share photo albums, videos, etc). For those purposes, one hardly needs an expensive personal computer, but proper feature-set (e.g., sufficient storage and performing graphics core) is recommended.

“The overall trend for netbooks continues to suggest strong growth in the category. Gartner estimates that 30-40 million netbooks will be sold next year alone. In the US, the Consumer Electronics Association shows that netbooks at #9 on the wish lists for teens,” said Matt Wuebbling from Nvidia.

Another interesting prospect for ULCPCs are education facilities, especially in emerging countries. Being relatively inexpensive and very efficient in terms of support for multimedia features, personal computers powered by chipsets like GeForce 9400M can actually revolutionize the experience of education.

“India already has a province in which children learn and do homework on these devices. And this is only the beginning,” said Irina Shekhovtsova, a spokeswoman for Nvidia.

Besides education, there are emerging retail PC markets, where every dollar counts and where ULCPCs can really become popular.

“I think you have to caveat the survey data and say, this is only in mature markets and does not contemplate attitudes/responses from some other potentially significant markets, i.e. China, India, Latin America. Places were low-cost computing is far more relevant perhaps,” said Mr. Calder.

Actually, low-cost personal computers were given a green light at the time when IBM allowed others use its IBM PC platform and the “IBM PC-compatible term emerged”, sometime over 20 years ago.

“Technically, low-cost PCs have been around for at least 10 years or more, why we did Celeron in the first place, and the category is going to continue to evolve with Atom fueling a new crop of innovative small designs. Of course, Celeron is better performer, but keep in mind one of the other benefits of Atom is low power, very very small die and small package, our smallest chip we make, which enables some very cool small form-factor and fanless designs,” noted the spokesperson for Intel.

There is yet another important market for ULCPCs: the extra computers. Many of us already own spare mobile phones, mice, keyboards, etc. for “just in case scenario”. Going forward, the consumers are likely to buy additional computers for specific purposes, e.g., to read recipes from the Internet while on the kitchen. What is important for PC manufacturers is to create the right balance between the price, performance, feature-set and price of such “extra” devices.

“I do see all-in-one PCs being the perfect “extra” desktop computer for folks who have a main PC but want something that isn't underpowered as a satellite system somewhere in the house. And I do see folks wanting thinner and lighter notebooks. The question is how much they are willing to sacrifice to get the right balance,” said Damon Muzny from AMD.

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