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The good folks over at engadget were talking to Sony Vice President Mike Abary - and in that conversation he apparently decried that devices like the EeePC would create a race to the bottom. Interesting perspective - but it may be slightly influenced by the fact that Sony doesn’t have a competing product and would rather not have to invest into a market segment that could seriously impact it’s ultra-light notebooks.

But instead of complaining about the lack of features (which seems to be implied in this comment), I think Sony should try what HP and Pioneer and others are trying: create a competitively priced product that provides better features and therefore can grab a higher price and maybe even higher margins.

I certainly think we are going to seeing many more products below $500 that don’t go for “cheapest” but for “best value proposition” instead. And for Intel, AMD and Via this is indeed a very interesting market. The margin in their business can be influenced two ways. Higher ASP (unlikely here as the OEMs can’t allow the BOM (bill of materials) to get too high) or lower production cost. That’s where tiny chips like Silverthorne, created on a 45nm process, come into play. If they can be produced sufficiently cheaper compared the current entry level CPUs (like the 65nm based Intel Celeron processor) then it is possible to have a similar or even better margin percentage, even if the resulting chip carries a lower sticker price. Via already announced their next generation Isaiah processor (still on 65nm, though) which will compete in this market, and I am sure that once AMD can produce its Geode processors on 45nm, they will see better margins from that, too.

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