MANAGERIAL ECONOMICS CASE: “BEGINNING AND END OF NETBOOK” Maria Alvarez Wallace Hsieh Quentin Lestra Alfred Liao.

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Presentation transcript:

MANAGERIAL ECONOMICS CASE: “BEGINNING AND END OF NETBOOK” Maria Alvarez Wallace Hsieh Quentin Lestra Alfred Liao

INTRODUCTION “Get ready for the next stage in the personal computer revolution: ultrathin and dirt cheap”

NETBOOK - CHARACTERISTICS Smaller notebooks: 7” to 10” screens Low weight: 1kg (2.2 pounds)Low cost: $200-$300 Simpler hardware / software features Longer battery life

TARGET MARKET

NETBOOKS ADVANTAGES Lower priceExtremely portable Competent enough for a light productivity session DISADVANTAGES Sacrifice high performance and functionality

MARKET BEGINNING Relatively small audienceComplementary device Feel more like toys or overgrown phones than full-featured computers Still, were a success story in the PC industry First to market EEE PC - ASUS

MARKET EVOLUTION Impressive increase in sales Many brands joined with similar products Very competitive market

MARKET EVOLUTION Netbooks grew in size and features, and converged with smaller and lighter laptops few distinctive advantages

What is the price of Netbook?

What is the price of Notebook?

What is the size of Netbook?

Which one made higher sales?

MARKET EVOLUTION APPLE launched the IPAD Affected netbook’s sales

APPLE “despite netbooks’ popularity, nobody really wanted a netbook per se”. they wanted full-fledged laptops that were very portable, or they wanted cheap machines that allowed them to easily surf the Web, use and do other light computing tasks. Rather than building a single netbook that fit both these audiences poorly, Apple built two machines that were, each in its own way, much better than any netbook ever

MARKET EVOLUTION 2011 Decline in netbook sales Price as the only strong pointLost in both fields Macbook Air & Ultrabooks Better features and performanceHigher cost Tablets (iPad) Improved computer capabilities (design, ease-of-use and portability) Similar price

APPLE MacBook AiriPad

What is the market share of Netbook?

Tablet V.S Netbook II

Tablet V.S Netbook III Substitute effect: Demand for Netbooks decreased

MARKET END The last remaining manufacturers, Asus and Acer, confirmed that the netbook is officially dead

ACER V.S ASUS MAIN PLAYERS IN THE NETBOOK INDUSTRY

ACER V.S ASUS OOK ASUS - EEEPCACER -Aspire one From 7 inch-10.2 inch8.9 inch only $ USD$259 USD Multiple modelsOnly one model

ACER V.S ASUS Q3 of 2008 OOK

ACER V.S ASUS OOK In 2009, the netbook market grew 110% to 34 million pcs, aspire one from Acer got 40% of it, and EEEPC from Asus got 30%, but the multiple choices strategy attributed to a lot of raw material stock couldn’t be sold out, Asus was almost bankrupted by it’s proud – EEEPC.

Question In Oct. of 2007, Asus launched the first netbook – EEEPC 701, the price was USD 199/pc; at that time, the price of notebook started from USD 522. Do you consider this introduction price for EEEPC 701 was too low? Was this a good pricing strategy?

THANK YOU!