$100 laptop at least three years away, Gartner says

  • Chicago (IL) – The $100 laptop was, well, not really a $100 laptop. In fact, the first OLPC notebook sells for close to $200 and clearly broke its initial promise. The second generation of the notebook, called XO-2, is expected to hit the market in 2010 for about $75, but market research firm Gartner doubts that it will be possible to break the $100 barrier.

    “The $100 laptop will not be a realistic target for the next three years,” Gartner’s Annette Jump wrote in a recently released research report. “All current versions cost notably more than $100 and prices are unlikely to fall significantly during the next two to three years.”

    According to Jump, increased demand for the devices, along with declining component prices, could potentially reduce prices by 10 to 15% in the next two to three years. But packaging, assembly and software costs are likely to remain the same. Notebook costs need to come down at least 40-50% to make the $100 laptop a reality and if Jump is correct, we will not be seeing these price drops anytime soon.

    Jump also noted that 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,” Jump said. “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.”

    Early lessons learned from deployments in emerging markets include the importance of financial provisions beyond hardware, planning and training for teachers and students alike, content development in line with the local school curriculum, the appropriate interface and experience suitable for schoolchildren, and permanent availability of technical support, according to the analyst.

    Cheap notebooks, often also referred to as mini-notebooks, also have some appeal to consumers and business users in mature markets, Gartner believes. However, in order to be successful, these devices need to be repositioned “as a window into the Internet,” Jump suggested. “We expect to see increased product innovation in the PC market during the next few years,” she said. “Mini-notebooks will create opportunities to reach many buyers across all regions, both in mature markets as additional devices, and in emerging markets as PCs.”