Nokia has announced pricing for its upcoming Booklet 3G netbook. At a hefty list price of $820, the Booklet 3G is sure to cause sticker shock among netbook shoppers. Apparently Nokia did not get the memo that the point of a netbook is to provide a smaller AND lower-cost alternative to the laptop.
Netbook sales have grown contrary to economic trends or any news of recession. In fact, it could be argued that the economic woes have contributed to the success of the netbook market, forcing users to scale down and look for more affordable options to meet their computing needs.
Financial considerations are one factor. The other chief driver of netbook popularity is the Web. An increased reliance on the Web and availability of web-based apps makes netbooks viable. Users simply need a device with a screen, a keyboard, and an ability to connect to the Internet, eliminating the need for expensive components like DVD recorders and large hard drives.
Netbook pricing starts around $250 and even high-end netbooks sporting larger hard drives and faster processors in an effort to straddle the line between netbook and laptop still typically come in below $600. By contrast, low-end laptops can be found under $400 with 3Gb of RAM, 250Gb hard drives, and DVD recorders. Clearly there is some overlap of both pricing and functionality between the two categories of mobile computers.
That makes the Nokia Booklet 3G price all the more shocking. Nokia is offering a device lacking in features found in other high-end netbooks at a price comparable to medium-end laptops. The Atom Z350 processor is slower than CPU’s found in other netbooks, and the 4,200 RPM 120Gb driver is both slower and smaller than drives found in competing products. Lucky Booklet 3G buyers get all of that for only 40 percent more than comparable high-end netbooks.
What is Nokia thinking? It is expanding into new territory by developing a portable computer instead of a mobile phone, and as its first offering it hopes to sell a device with a slower processor, and a smaller, slower hard drive while charging more than $200 more than existing competition? It doesn’t sound like a solid business plan.
In Nokia’s defense, the Booklet 3G is not without some innovative or unique features which set it apart from the competition. The battery runs for up to 12 hours- double that of many other netbooks. The case is aluminum instead of plastic. It has a built-in GPS receiver and it is designed to use HSPA wireless communication in addition to WiFi connectivity found standard in other netbooks. I don’t think that justifies paying $820 though.
Of course, Nokia is first and foremost a mobile phone manufacturer. That means it has a long and stable relationship with the mobile service providers and it can leverage those relationships to offer subsidized netbooks just as mobile service carriers offer subsidized mobile phone devices.
Nokia may find that the competition is even tougher in the subsidized netbook market though. AT&T and Verizon already offer very cheap netbooks in exchange for a contractual commitment for service. Those packages start around $200 for fairly well-equipped netbooks. Even subsidized, the Nokia Booklet 3G will probably be at least $400, and the unique features still do not offset the speed and power the device is lacking or justify paying the excess price.
I don’t think this is going to end well for Nokia without some significant changes to the Booklet 3G functionality, or the price, or both.
Tony Bradley is an information security and unified communications expert with more than a decade of enterprise IT experience. He tweets as @PCSecurityNews and provides tips, advice and reviews on information security and unified communications technologies on his site at tonybradley.com.