Are Netbooks Bad for Business?

Netbooks have grown more and more in recent years as technological advances have made them a more affordable solution for consumers who don’t want or can’t afford laptops. Netbooks may become even more popular with the introduction of Intel’s new Atom processor chip, which will provide better performance than its previous chips.

But is the increase in the popularity of netbooks a good thing? Some people have said no: it will ultimately lessen the demand for more expensive laptops, which will lessen companies’ profits and discourage innovation. Does this argument hold water?

It may, but more research is needed to determine the truth. If netbooks become more because of their cheaper price tag, companies could sell more netbooks than they would laptops, therefore having sales volume make up for the lower price of netbooks. Furthermore, while plummeting prices can powerfully alter a market, structural change is a crucial part of our economy. Nobody is arguing now that the cell phone industry is worse off for the price drops cell phones have seen since the ’80s.

Since netbooks are cheaper, people could also be more willing to replace them than laptops. It is much more attractive to drop $300 for your netbook than $900 on a new laptop.

Via The Atlantic.

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