Where have hardware margins gone these days? Best Buy has announced a new HP laptop priced at a very aggressive $197, which will go on sale this week as part of the retailer's Black Friday sale.
Best Buy is calling the model its "first-ever, value priced HP laptop." The $197 machine comes with an Intel Celeron 900 processor, 2GB memory and a 160GB hard drive. HP's new laptop beats out the $249.99 Acer laptop that Best Buy unveiled last month. The store is also offering Intel Atom-based netbooks priced below $200 for the upcoming holiday.
While PCs sales have rebounded lately, the increase comes at a steep price as prices -- and margins -- have declined dramatically. Gartner recently reported that it expects 2009 PC shipments to increase 2.8 percent while PC revenue falls 10.7 percent.
The trend of falling hardware prices, especially for mobile PCs, looks to continue after the holidays. A recent article in Linux Journal suggested that Google could offer a free Chrome-based netbook.
Since the applications will be Google's free, cloud-based Apps, the hardware requirements will be minimal. And with the falling costs of PC components, Google could potentially make up for the cost of the hardware by running Google App-based advertising on the desktop.
