Do Nokia Booklet's specs justify netbook's $820 price tag?

Industry experts claim Nokia's netbook is too expensive

Designed to be as light on your wallet as your shoulders, most netbooks cost between US$300 and $500. Their low price is helping netbooks continue their fast growth, despite the economic downturn.

Nokia, however, is bucking the pundits with its Booklet 3G netbook, which the Finnish phone maker announced today will come with a list price of US$820.

While the Booklet offers some premium features that set it apart from most netbooks, analysts say its high price could drive away all but the most well-heeled customers.

"The price is pretty excessive," said Jeff Orr, an analyst with ABI Research. While Nokia obviously hopes to market the Booklet 3G through wireless carriers that will help subsidize the cost of the Booklet to end users, Orr said it's unlikely to make a huge dent.

Based on current offers, such as AT&T's $99 price for Acer Inc.'s $300 Aspire One netbook, "the most I could see is a $250 or $300 discount," leaving customers to still have to foot a $500-plus bill.

That is "too high for the general market ... You can get a decent laptop for less," said independent analyst Jack Gold. "As long as the price remains at that level, the market for this device is going to be very limited."

There were clues that Nokia's first netbook would shatter the price ceiling for the category.

When Nokia previewed the Booklet 3G a week ago, it said the machine would include luxurious differentiators, such as a battery that would run 12 hours on a single charge, an aluminum case, a GPS receiver, and, mobile broadband via HSPA (High-Speed Packet Access) technology.

Most netbooks come with predominantly plastic shells, batteries that last four to six hours, no GPS receiver, and Wi-Fi access only. 3G data technology such as HSPA typically adds between $50 to $150 to the price of a netbook, according to analysts.

At its Nokia World show today, the vendor revealed that the Booklet's long battery life is derived from a 16-cell lithium-ion battery. Most netbooks come standard with three cell batteries, with six cells as an option. More cells equal longer battery life.

Nokia also said the Booklet's 10-inch screen will offer 1280 x 720 resolution, which is sharper than the typical screen of its size. At just 2 cm thick, it is drawing comparisons to the MacBook Air. It will also come in three colors, and in users' choice of Windows 7 flavors: Starter, Home Premium and Professional.

On the other hand, the Booklet's other specs are average or even below average compared to other netbooks. Its Atom Z530 1.6 GHz CPU is considered a shade slower than the Atom N280 used in most other netbooks today, as is its 4,200 RPM 120 GB hard drive.

Nokia aims high with Booklet

While Nokia has long been the mass market leader in cellphones, it has a history of aiming at the premium market in related categories, going back to the first Nokia Communicator 13 years ago.

Those products have met with limited success, even when priced competitively. For instance, Nokia launched the N810 Internet tablet in the U.S. last October. After Nokia discontinued the device in the U.S., according to Orr, within three to four months, the N810 was discounted to customers for as little as $220.

"They've had challenges in some markets to get the volumes they want," Orr said.

The HSPA technology used by the Booklet is in wide use outside of the U.S., giving Nokia a plethora of potential partners among wireless carriers. In the U.S., however, the only carrier with the right mobile data technology is AT&T, Orr said. That wouldn't necessarily conflict with AT&T's support for Apple Inc.'s iPhone, Orr said, since he sees the Booklet's target customer as a businessperson, not a consumer.

AT&T might still cry foul at the Booklet's inclusion of Nokia's Ovi Suite of mobile services, Orr said. That could be settled if Nokia disables the Ovi Suite or gives AT&T's pay-per-use services preferential branding on the Booklet's Windows desktop, he said.

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Eric Lai

Computerworld (US)
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