Cheap tablets tough to swallow

Industry players have poured scorn on a US box builder's offer of cheap tablet PCs pre-loaded with Linux to kick-start sales of the pricey portables.

New York-based box-builder Element Computer said 1 December it had partnered US Linux distributor Lycoris to offer a convertible notebook/tablet PC -- the Helium 2100 -- for US$999.

Most tablets run Microsoft Windows for Tablet PC Edition -- a more expensive option than Linux. Convertible tablets usually carry a recommended retail price of about A$4000. Australian sales so far have reflected the high prices, with tablets only making up about 1 percent of the 150,000 notebooks sold quarterly.

Andy Woo, a hardware and systems analyst at research firm Gartner, said Linux and other open source software was a long way from taking market share from Windows in the tablet PC market.

'This isn't ground-breaking stuff as far as I'm concerned. There is a lot of swell around the whole Linux environment, but to go to tablet PCs we have to sort out the desktop environment first,' he said. 'It's a bit of a gimmick.'

He said that although Linux was spreading in the enterprise server space, Linux client applications were still not sufficiently compatible with other systems and software to be broadly adopted.

Woo said Element Computer's move was probably that of a small company trying to lift its own sales. However, resulting sales would be too small to make a dent in the overall market.

'They might sell an extra four or five tablet PCs in a quarter to Linux enthusiasts,' Woo said. 'The bottom line is that Microsoft has got nothing to worry about.'

Frank Sheu, MD of distributor and box-builder Synnex, said Linux was not likely to win out on the tablet PC while Windows remained enterprise client platform of choice.

'I don't think so. I don't think it will ever work. Because with notebooks, people buy them to link to their office or network so people want them shipped with XP,' he said. 'I don't think it makes any sense at all.'

The Melbourne firm had not considered making tablet PCs at its new build-to-order facility but conceded that tablet PCs' price point was too high. Meanwhile, at a Taiwan computer show in November, price points on notebooks were coming down as low as $1,200, he said.

'Notebook vendors there were offering [notebooks] from 1.2kg with full functionality, retailing for $1,499 with a desktop CPU,' Sheu said. Maree Lowe, director at Sydney box-builder ASI Solutions, said she questioned how Element Computer could provide a tablet PC for that price, even with Linux on board.

'It's incredibly cheap. How are they doing it? ... There's quite a lot of business interest in Linux,' she said. She said ASI itself had been loading some Linux for some point-of-sale packages and small business clients. 'But to get it on a tablet, that's amazing,' she said.

Lowe said she did not think anybody could get it down to US$999. Yet companies were showing interest in tablet PCs, Lowe added, but not for the prices available.

'They're not ready to pay,' she said. 'They say 'yes, we're interested in tablets, but they're not light enough or ruggedised enough'.'

US-based Element Computer was contacted for comment but had not replied by press-time. However, the company said in a statement that the US$999 price was not a special offer.

US$999 was a recommended retail price for the Helium 2100 running a copy of Lycoris' Desktop/LX Tablet Edition OS on a 1GHz Via Antaur-powered platform.

It has a 14.1in XGA touch panel active matrix display, 256MB of installed memory, 30GB installed hard drive, up to three hours battery life, a full range of ports and optional 802.11b compatibility.

It supports other Lycoris software titles such as the ProductivityPak office suite, the company said.

Mike Hjorleiffsson, president of Element Computer, said that the company would make money on every unit. 'We ... have less overhead in the OS to deal with. Element passes that on to the customer,' Hjorleiffsson said.