If VIA can't do it (the $100 PC), then nobody can

If VIA can't do it (the $100 PC), then nobody can

Summary: Over the recent year, there's been a lot of talk about the so-called $100 PC.  Last fall, during Gartner's Symposium in Orlando, Microsoft CEO Steve Ballmer talked about why "we" need a $100 PC.

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TOPICS: PCs
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Over the recent year, there's been a lot of talk about the so-called $100 PC.  Last fall, during Gartner's Symposium in Orlando, Microsoft CEO Steve Ballmer talked about why "we" need a $100 PC.  In certain parts of the world -- parts that Microsoft sees as growth opportunities now that other markets are saturated --  Microsoft has been selling Windows and Office (in some cases, stripped of certain features/functions) at cut-rate prices in hopes of stimulating demand.  Last month, in an interview with CNET News.com, AMD CEO Hector Ruiz claimed the $100 PC is on the way.  In fact, Ruiz went as far as saying that the PC would be a laptop PC.  Said Ruiz in the interview, "I don't think a $100 computer is out of the question in a three-year time frame. A lot of people forget that the first cell phones came out at $3,000 to $4,000 dollars and today are free. I think there's going to be some of that same kind of movement with computing and communications devices.....I think, within three years, it's not at all unreasonable to think of a $100 laptop for that segment."  But is $100 achievable, particularly when you take the cost of a decent monitor into consideration?

This week, VIA Technologies announced that it is readying a $250 PC that will be out by Fall 2005.  VIA has a reputation for being a low-cost provider of PC components and has even been on the receiving end of an Intel lawsuit after offering inexpensive substitutes for Intel's chipsets. While the $250 includes a monitor, getting the system down to that price required some compromises.  &For example, the system comes with a 1 GHz processor (ancient compared to today's offerings), only 128 MB of RAM, and the preinstalled operating system and applications are installed in read-only flash (an approach to building PCs that has completely failed in almost every previous attempt).  Consdiering those compromises and the fact that VIA can only get the price down to $250, it's practically impossible to imagine a $100 PC, including monitor, anytime in the near future, let alone a  $100 notebook.  Notebooks are invariably more expensive than their desktop counterparts.

On the heels of Ballmer's proclamation, I blogged that Sun president and COO Jonathan Schwartz's idea of a free PC might stand a better chance of entering the market than a $100 PC.  The difference is that with the free PC, you'd probably get it from a service provider -- for example your ISP -- and you have to pay for the services instead.  The question for service providers is: at what point will the average revenue per unit (the ARPU) make free PCs a profitable business model? The open source world has proven that the free product/paid services model can work. 

At the recent Open Source Business Conference, Schwartz said the model isn't restricted to the technology business.  Schwartz gave an example of where cars might one day be free, as long as the services that car manufacturers can package with them generate enough ARPU.  Schwartz said that auto execs had already done the math and now, it's just a question of what services can be added on to drive up the ARPU to approximately $220 (in addition to services that are  available today like GM's OnStar).  More on the idea of free cars in an upcoming blog. Schwartz's position on the issue isn't surprising.  The lower the ARPU break-even point, the easier a time certain service providers will have in shifting to the free hardware model.  Thin clients -- computers that draw their compute and storage horsepower from the network -- represent one way to keep the hardware costs down. Between Sun's SunRay systems (designed to replace home PCs) and Java, the company has enough technologies in place to deliver an end-user experience that's as rich as that offered by the PC (for most but not all applications), one that's equally if not more secure.  But, as evidenced by a starting price of $359 (without the monitor), even Sun has had difficulty in getting the acquisition cost down to a point where its thin clients can compete with stripped down PCs like the one VIA is looking to offer.

Topic: PCs

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7 comments
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  • Everyone can do it for $250-$300

    Every week I see in the advertizing circulars, a computer system for less than 300 bucks. Yes, there are rebates involved, but the overall cost is very good.

    Getting the price point down to 100 bucks is fairly daunting! Monitors cost about that. Having a LCD screen for a laptop that is, say 12 inches would cost about $100 in bulk. I just don't see this happening. If those people had TVs, then you COULD sell a computer sans monitor for $100. This is what the Amiga did in Europe (the SCART connector on TVs). There was talk about making Amigas or Commodore 64s for the Asian market - and the target price was around $100 (you could put an entire Amiga computer on a chip). I never heard anything about that after it was suggested in the early 90s.
    Roger Ramjet
  • The $100 Computer

    Before you know it, the major cost of a computer will be its monitor. Once upon a time companies like Commodore dealt with this by providing RF output to a standard TV set, though this limited display quality.

    In the next few years, as people make the expensive, quantum leap to HDTV, the way will be clear to plug a compact $100 PC into the HDTV monitor without sacrificing screen resolution.

    Now if we could just reverse engineer our bodies to grow smaller hands, we could downsize the keyboard too!
    1ceman
  • Doomed to fail

    If the hardware limitations are in place that are discussed in this article, this $100 PC is stillborn.
    ejhonda
  • This has been done...

    It's called Nintendo GameCube ($99). The XBox and PS2 aren't far behind ($149). All of which are underpowered computers in a sealed box and closed environment, especially the XBox.
    DAMANgoldberg
    • Think cell phones

      This article mentions that providers may start providing computers as incentive for subscriptions. It looks like the tech industry is starting a trend towards service. I work for a software company and our ASP division recently surpassed the 50% mark for total annual revenue for the comapny. In 4 years!!!! Cell phones were once for the rich and famous and now every kid has one. It is inevitable, "There will be a computer in every house" very soon.
      quanl@...
  • You can get one close to that now

    Go look at the refurbished machines at dell.com, if you catch them on the right day, you can get a p4 celeron for about $200, with free shipping, or spend $100 more and get a P4 3ghz. Sure that's double the price of a $100 machine, and there is no monitor. I think that what we really need is a $100 pocketpc type OS device, that runs on batteries, but has a larger screen, and internal and external storage with network and dial up connectivity.
    informationworker
  • Back in the dark ages ...

    My very first "computer" was a Timex Sinclair 2000, purchased for $99 and hooked up to my TV. I know of store owners who ran their businesses using this under-$100 personal computer! Of course, it's sticks and bones compared with today's technology, but that $100 PC has already been done.
    glencbr@...