Dell Inc. (Nasdaq: DELL), already the largest seller of PCs to schools worldwide, is trying to extend its lead with its first "netbook" designed for young students at a time when adult consumers and businesses have cut back on technology spending.
The world’s No. 2 PC maker is entering a rapidly growing and competitive market segment. Lenovo, which maintains its global headquarters i Morrisville, N.C., is rolling out a new line of Ideapad netbooks this month. Acer, meanwhile, recently cut into the global marketshare leadership of Dell and No.-1 ranked HP with its fast-growing netbook line.
Dell also is pricing and equipping its new line at a much higher level than the Linux software using One Laptop Per Child product that sells for around $100 and is backed by Raleigh, N.C.-based Red Hat.
Dell’s new Latitude 2100, which is being unveiled at an event Tuesday in Australia, is part of a newly popular category of computer that’s much like a laptop, but cheaper, smaller, lighter and less powerful.
Unlike Dell’s other netbooks, the 2100’s shell is made from brightly colored, easily gripped rubber, not slippery plastic. Its underside is free from vents and other openings, so plopping the computer on spilled milk won’t do any damage. And a light on the lid of the computer tells teachers when kids are connected to the Internet.
The extent to which laptops improve academic performance remains debatable, but Dell Chief Executive Michael Dell, perhaps not surprisingly, argues that computers in classrooms are a key ingredient to better schooling.
"There’s no question that technology can play a role in improving outcomes for students," Michael Dell said in an interview. "This is not to say that putting computers and (information technology) systems in schools solves all problems – there’s no chance of that. But it is to say that, look, these are required skills that people need to be successful."
The 2100, aimed at students in kindergarten through eighth grade, has a 10-inch screen and a keyboard that’s a little bigger than regular netbooks. It can be configured with a touch screen, which Dell says is useful for kids’ small hands, and an anti-microbial keyboard, because those hands are often grubby. A Web camera add-on is also available. It can run basic versions of Microsoft Corp.’s Windows XP and Vista operating systems and the Ubuntu version of Linux.
Unlike the still-mythical "$100 laptop" envisioned by the nonprofit One Laptop Per Child organization, Dell’s machine starts at $369, which might put it out of reach in developing countries. Add on popular features and Dell said the price will be more like $500. David Daoud, an analyst for the technology group IDC, said schools typically negotiate prices down by about $100 per machine.
Dell, which operates one of its largest assembly plants in Winston-Salem, N.C., would not say how much money it makes selling computers to schools. Michael Dell said the company’s public sector segment, which also includes governments and health care institutions, takes in $14 billion a year, about 23 percent of Dell’s 2008 revenue.
PCs for schools and universities made up just 6 percent of the total shipped last year worldwide, according to IDC, with about a third going to the U.S. Worldwide, Dell was the top player with nearly 20 percent of the market. In the U.S., its grip was even tighter – about 36 percent for kindergarten through 12th grade and 43 percent at the university level.
In the U.S. in particular, there’s room to grow in kindergarten to 12th grade classrooms as schools push toward a one-computer-per-student ratio, Daoud said. (Today, the ratio in U.S. primary education is more like one PC for every three or four students, said Larry Cuban, a professor emeritus of education at Stanford University.)
At the same time, universities are pressing students to come to campus with their own laptops rather than stocking computer labs, Daoud said.