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Thinkpad (AXcess News)Sterling, VA - Dell is driving down prices on Media
Center notebooks with the introduction of its new M140 to its
consumer-focused XPS notebook line. Featuring a 14W chassis and
Microsoft's Windows Media Center Edition (MCE) OS, Dell's M140 line
has a starting price of $999. The Dell M140 will be available in
November 2005.
Katz runs the company with 22 paid employees and 300 volunteers who give technical support to new users and are compensated with free memberships (remember those days at AOL ). He rents space in two AT&T data centers, one in Manhattan, another inSecaucus, N.J., with $700, 000 worth of computer equipment, end servers from Dell Computer and five IBM Unix servers. The $2 million annual payroll is his biggest expense.
Microsoft The M140 is Dell's most recent addition to its XPS family. In
September 2005, Dell launched a campaign around its XPS brand to
reposition the XPS- brand from solely a gaming centric device to
include a comprehensive array of high-end, home entertainment
offerings. In conjunction with the new brand campaign, Dell
launched a new service package for the XPS systems including a one
year warranty, a dedicated phone line and sales representatives
resul ting in reduced hold times for XPS customers, an online chat
forum and XPS-trained technicians. Dell's XPS notebook family now
includes two product lines, the 17W M170 and the 14W M140, Media
Center notebooks.
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Laptop Computers Dell's new M140 line features a range of Intel's Pentium-M 700
series processors, Intel's GMA 900 graphics processor with
integrated VRAM, XP Media Center Edition OS, a standard six-cell
battery, and a weight of 5.47 pounds. In addition, Dell's M140
features a 5-in-1 media card reader and instant-on functionality
through its MediaDirect technology. The Dell M140 does not come
with an integrated TV tuner, but there is an option to upgrade for
$130.
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Laptop Computer Dell has upped the ante now offering two sub-$1,000 Media Center
notebooks, XPS M140 and Inspiron 6000, in the consumer notebook
market. This is a significant milestone for the Media Center
notebook, which has seen little consumer acceptance in the consumer
notebook market -- until now. Media Center notebook sales have thus
far been stifled by the significant price premium they carry over
other notebooks. However, Dell's plunge into the sweet spot of
mass-market price points will push Media Center notebooks into the
hands of mainstream consumers.
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Desktop Computer In order to hit these low price points in its luxury XPS-brand,
Dell has incorporated the Media Center operating system into a
mainstream 14W form factor and has not included an integrated TV
tuner. This design goes against the current notebook trends, in
which manufacturers' add Media Center operating systems to their
larger 15W or 17W desktop replacement models in order target
customers who want to watch and record TV on their PC. However, the
current trend of Media Center sales in the U.S. retail desktop
market begs the question: How are consumers utilizing the Media
Center operating system? Recent sales surges of Media Center PCs
sans TV tuners in the U.S. retail desktop PC market suggests that
consumers are primarily using the Media Center operating systems to
store and share their digital libraries, and not to watch TV on
their PCs.
Notebooks This data suggests that Media Center notebooks do not need to
feature large screens, but simply need to be priced appropriately
for the mainstream market. Dell nails this latter point with its
XPS M140 ASP of $999, which is lower than the average selling price
of a notebook in the U.S. retail notebook market ($1106). By
offering sub-$1,000 Media Center notebooks, Dell will shift the way
competing manufacturers will begin to incorporate Media Center
operating systems into their mainstream designs.
Lenovo However, not only will Dell challenge the overall Media Center
notebook market a sub-$1000 XPS-branded notebook line, but Dell's
M140 is a direct attack against HP's dv1000 line. Both Dell's M140
and HP's dv1000 line feature 14W chassis design and are tagged as
an entertainment PCs. HP's line includes instant-on technologies
with HP's QuickPlay, and the occasional SKU also includes a TV
tuner in the box. Dell also features instant-on technologies with
Dell MediaDirect and raises the bar with incorporating the Media
Center operating system into its base model.
Hard Drive HP's dv1000 features both a pre-configured and a configurable
model, neither of which offer Window's Media Center. Only HP's 17W
zd8000 line offers an upgrade option to the Media Center OS for an
additional $199 (including a dual tuner). In a head-to-head
comparison, HP's dv1000 with the XP-Home operating system is more
expensive than Dell's base M140 model. When configured similarly,
HP's system costs $1,069 after a $50 mail-in rebate, and Dell's
M140 is priced at $999. This is a huge win for Dell as HP's 14W
dv1000 line is a key model for HP's consumer product line. In
September 2005, HP's dv1000 line accounted approximately 30% of its
Pavilion-branded sales in the U.S. retail notebook market.
Travelstar Dell's new price point for its 14W Media Center notebook is
going to have a ripple effect across the notebook industry. Unlike
other manufacturers, Dell is offering a $999 Media Center without
any special limited time promotions. Manufacturers are going to
need to follow suit and offer Media Center notebooks with both
tuner and tuner-less options to target a broader range of
customers. If HP plans to continue to emphasis the entertainment
functions of its dv1000 line, than it will need to also include a
Media Center option. HP could leverage a Media Center op ti on in
its dv1000 line to differentiate the 14W Pavilion line from its
sister Compaq Presario V2000 line.
Gateway Dell's XPS M140, with its combination of high end feature sets
including Media Center OS and VIP service offering at a $999 price
point, brings a new dimension to the 14W notebook market. This
product will quickly steal share from the fast growing 14W notebook
market.
Laptop Parts Dell Media Center notebooks will lead the transformation in how
manufacturers integrate Media Center OS into their systems.
Notebook manufacturers will be pressured to follow suit and offer
Media Center options at aggressively low price points.
Software Source: Current Analysis
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