HP gets serious about Netbooks

Update: This blog has been corrected to reflect that the Mini 1000 will be available Wednesday on HP.com, and in retail stores later.

After a brief experiment in the education market, Hewlett-Packard on Wednesday is set to introduce a whole line of Netbooks for mainstream consumers.

The HP Mini 1000 comes in three versions, with starting prices ranging from $379 to $699, and will be available on HP.com starting Wednesday, with worldwide retailers to be announced later.

HP first dipped its toe into the mini-notebook market back in April with the Mini-Note 2133, which it claimed was strictly for K through 12 students and some business travelers. At the time, HP was adamant that this was not meant to play in the same arena as the consumer-oriented Netbook from Asus, the Eee PC. Though it won't break out the numbers, HP now says the sales of the 2133 "exceeded all expectations."

But the new HP Mini 1000, Mini 1000 MIE, and the Mini 1000 Vivienne Tam Edition are very much intended for consumers. So what's changed in just six months? The look and feel of the Mini 1000 line isn't drastically different from the 2133, but the Netbook market has had a dramatic makeover, though it's more noticeable abroad than here in the U.S.

First let's look at what's different between the Mini-Note 2133 and the updated version: The Mini 1000 is actually a "Netbook" in the true sense this time around--as in, it contains Intel's Atom processor, rather than the C7 from Via.

Second, there are more options depending on the features a person needs, and a cheaper low-end device, now starting below $400. The Mini 1000, intended for productivity applications, starts at $399 and is available starting Wednesday. It comes with Windows XP and either an 8.9-inch or 10.2-inch screen, for $449. The MIE, meant for more casual, online activities, starts at $379, comes with Linux, but won't be available in the U.S. until January. The Vivienne Tam version--which HP previewed at New York Fashion Week last month--will go on sale in mid-December starting at $699. All will be initially for sale on HP.com.

Otherwise, compared to the earlier 2133, the basic computer they're shipping is essentially the same. A little thinner, a little lighter--due to the plastic case rather than the aluminum of the 2133--but with the same 92 percent keyboard, built-in Webcam, wireless, and options for solid-state or hard-disk drives.

However, the Mini 1000 exudes a ton more personality than the 2133. There's better design inside and out, with black ripple patterned casing or the loud red Vivienne Tam-printed version. Although on the inside is where HP's done the most work, namely to disguise the fact that with the MIE model, you're using a Linux-based device.

The HP MediaStyle interface is available on the Mini1000 MIE version, which comes with Linux rather than Windows XP like the other two models. MediaStyle sits on top of Linux and is a dashboard that takes users to music, IM, photos, videos, and the Web with one touchpad click, which HP says will shield users from ever having to interact with the open-source OS.

"It's important we made sure that Linux does not manifest itself to the user," said Carlos Montalvo, vice president of marketing for the Personal Systems Group at HP.

Different colors, screen sizes, and slightly lower price tags have been the only way PC makers have come up with that set these tiny notebooks apart thus far. By creating a unique interface option on the MIE, HP has officially made the first real move to differentiate these Netbook devices. (It's similar to the way the company's TouchSmart interface sits on top of its TouchSmart desktop's Vista OS.)

The MediaStyle interface makes the Mini1000 stand out better than any bold pattern from a hot designer ever could, and should definitely grab some attention during the upcoming holiday shopping season.

This all looks great on paper, of course. Why shouldn't the biggest PC maker in the world be able to sell a lot of these trendy tiny notebooks when lower-priced options in a down economy could be particularly attractive to cost-conscious consumers?

But in the U.S., it's still unclear whether there's a viable market for Netbooks. People are buying them, but may be doing so in place of traditional notebooks. For PC vendors, that's like taking one step forward and two steps back.

Luckily there's more to the PC industry than North America, and right now, the key for Netbook pushers is Europe.

In March 2008, when HP introduced the Mini-Note 2133, IDC estimated that the year would finish up with 3.6 million Netbooks shipped worldwide. As of October, IDC is now estimating that 10.9 million Netbooks will ship.

It's a dramatic increase, and the difference is all coming out of Europe, the Middle East, and Africa (EMEA), where Asus and Acer have been incredibly aggressive about their Netbooks, the Eee PC and Aspire One, respectively. Of the 10.9 million units that are estimated to ship worldwide by the end of 2008, 8.1 million will go to EMEA, says IDC.

Acer and Asus have done well in the region, as evidenced by Acer's quick rise to the top of the portable PC market there. But they've been aided by local telecom companies, who are subsidizing Netbooks in exchange for a signed wireless service contract. It's a model that in the past few months has thrived in Europe.

Dell signed up Vodafone for this kind of deal on its Netbook, the Inspiron Mini 9 in September, but HP's mostly been on the sidelines in this regard, and representatives for the company haven't indicated if a similar deal with wireless providers are in the works.

Either way, in the end, HP is among the best positioned in the Netbook market: It's the biggest PC maker out there, and has the resources and industry clout to actually do something relatively different in the Netbook space, as demonstrated by the MediaStyle interface. But whether success comes at the cost of selling traditional notebooks still remains to be seen.