Although it was originally designed for the education market, there’s no denying that the HP 2133 Mini-Note PC has a lot of crossover appeal. The company’s first low-cost mini-notebook, which comes on the heels of ASUS’ big splash with its Eee PC, has been available for only a couple of weeks and is already on backorder.
But will HP be able to eclipse the success of the Eee PC and stay one step ahead of competing machines from Acer and Dell? Kyle Thornton, HP’s product manager for the Mini-Note, certainly thinks so. In fact, Thornton told us that ASUS “missed the mark” with its 7-inch Eee PC. (The gloves are off!) Other juicy tidbits: Consumers should be able configure their Mini-Note any which way, so if you want to mix and match a solid state drive with XP or a high-capacity hard drive with Linux, you should be able to do that. Oh, and if you’re waiting for HP to offer a Mini-Note with Intel’s Atom inside, the company hasn’t yet decided if it will offer that processor or VIA’s CPU in future iterations. Read on for the full interview. Has consumer interest in the Mini-Note met your expectations thus far? Honestly, the reaction has been beyond our expectations. It has far exceeded the most similar type of response in our history, which was the launch of the iPAQ. All the worldwide press coverage has surpassed the iPAQ reaction. What can you say about sales? I can’t go into many details. We are in the process of ramping up. We are trying to get things up as fast as we can. We are in a backlog situation and that is all I can say. We are selling as many as we can push out of the factory. Do you think that you will be able to keep up with demand? I think so. There is a lot of flux in the market right now. Obviously, others are entering the space: Dell announced, Acer announced, and ASUS announced some additions to its Eee PC platforms. So there are a lot of entries. From a timing standpoint, ASUS came out late last fall. I don’t think we were hurt by that. The timing has been really great for us. I think a lot of people took a wait-and-see attitude, and we are seeing a lot of that turn into sales. Do you believe ASUS blazed the trail for the mini-notebook market? I do give ASUS credit for being the first one out. It is always tough being the first guy out there. But being first, on the other hand, doesn’t always mean you did the right thing. I think them switching from a 7-inch to an 8.9-inch screen tells you they missed the mark on the first product. I think in this market, which is clearly in flux, there is room for mistakes. It sounds like they are getting their ducks in a row, but they have done a good job forging the way. What is the target market of the Mini-Note? Do you see it expanding? Obviously, education is number one. We did have some nice orders from the education accounts that told us they would buy if we built it for them. We are seeing a lot of demand from the consumer market. And then there is the market for traveling professionals who are looking for a secondary PC. Given that you can buy a well-equipped traditional laptop for under $600, how does HP plan to differentiate the Mini-Note from other lower-cost systems? Mini-notebooks or ultralights, whatever you want to call them, have traditionally been out of reach for the mainstream consumer because of the price point. People have always desired a highly mobile computer that acts, looks, and performs like a real PC, but $1,500 and beyond was just too much for the mainstream. There are a couple of killer applications for the Mini-Note and others in this category. One is price. Also, I think mini-notebooks are very personal and there is a wide variety of industrial designs. One of the key things about the HP Mini-Note is that it is by far the best-looking device out there. People want good looking and small devices and they want enough performance to do what they want. I do see comparisons to systems that are two or three times the cost or performance. I think once we have a good handful of mini-notebooks across manufacturers we can set people’s expectations on price and performance. As the popularity of mini-notebooks increases, is there any risk of them cannibalizing sales of traditional portables? I think for HP it fills a niche in our product line. Right now we are doing well for both consumer and business notebooks, but coming from the business side there is quite a separation between corporate enterprise notebooks and the Mini-Note. If you want full security or common docking you are still going to gravitate to one of those business notebooks. I still think enterprise customers will gravitate to a larger 15-inch notebook. How important is the fact that customers will soon be able to configure their own Mini-Note? I think that is going to be huge. Right now we have fixed configurations just to get the manufacturing ramped up. There is a lot of complexity involved in configure-to-order. We will start to broaden options and allow people to customize their machine. It will be very open and HP will allow people to really order what they want. We will be expanding our offerings; XP will be launched in middle of May so customers will have a choice between Linux, Vista, and XP. You will be able to choose RAM size and hard drive size. Lots of people don’t want to be cornered into a fixed configuration. The only limit will be the individual’s pocket book. Do you think Windows XP will be the platform of choice for the Mini-Note? I think the rate of Vista adoption is slower than expected. I think Windows XP will be a very popular platform. Why did you decide to offer the SUSE version of Linux? What about Ubuntu or Xandros? We do know that, compared with other Linux offerings, it is not the most consumerish. We have a very strong relationship with Novel, so it was a quick-to-market strategy. We are working with Novel to take aspects of their OS and make it more consumer-friendly. I think the underlying OS is still a richer OS than we see on the consumer side. Obviously, you are going to see a lot of Linux offered. Our approach is that we want to have a solid foundation for Linux and we feel that Novel has a lot of enterprise types of features that consumers might not initially appreciate. In the long haul I think more people will expect more Windows-like performance with a friendly graphical user interface. What is your take on the upcoming Intel Atom platform? Do you see it beating out VIA? I think it’s too early to call a winner. HP is talking to both Intel and VIA and we are in the middle of this discussion. We will make a decision for future road maps in due time. In the same platform, we probably won’t offer both options. We will settle on one. Was it an engineering challenge to fit a full-size keyboard into the Mini-Note? I would say it is more of a mindset issue; we could make the keyboard whatever size we want to. At that time it was a secret-sauce formula and now we expect competitors to duplicate it. When we mapped this product on the drawing board one of the key criteria was that it had to be functional. Based on our experience we know one of the Achilles’ heels of competitors to the Mini-Note is the size of the keyboard. Our feedback working with education was that kids’ dexterity in typing is not the best with mobile. You do need bigger keys and key tops for them. Do you feel the vertical mouse buttons were a sacrifice that had to be made? We actually took note of other devices, including the Eee PC. When we got it out to people with the mouse button below the touchpad, like some devices have, it was just a bad experience. We also noticed the size of the touchpad was important to people and that when we put the buttons on the side a lot of people gravitated to two-hand usage, and they had no problems with it. We saw a lot of people putting one hand on the touchpad and another on the button. Only adults had the concern over the vertical buttons, but kids got it very quickly. Devices like the Samsung Q1 and the OQO are obviously struggling in the wake of the Eee PC and Mini-Note. Do you feel like the traditional UMPC has a future? Those are very tough. They are totally different usage models; they are slates or sliders and require more thumb-typing. I think it’s a very niche type of market. With the Mini-Note, you are seeing more horizontal acceptance to it. Samsung and OQO would never end up in a classroom, because of the price point and the size. Is it going to be tough for them? Absolutely, but I think they are still going to prod away and go after those vertical markets. It’s widely anticipated that both Acer and Dell will enter the mini-notebook market this summer. How will HP stay ahead of these new competitors? I think the first generation is always toughest for anybody. I think we will stand 120 percent behind the HP Mini. I think we will try and do a better job of highlighting our design and large keyboard. There will be a lot of people going out with first-generation products, which will be very good efforts. But just like tablet PCs in the past, I think you will see their second and third generations making adjustments to the size of display and keyboards. I think it will be interesting to watch. ASUS and Everex have announced WiMAX-enabled mini-notebooks, as well as plans to offer screens measuring 10 inches or larger. What is HP’s position on adding those types of enhancements? I won’t deny that we don’t hear all those things and we don’t investigate just in case we have to act accordingly. In my opinion, we have a really good device. It met a lot of people’s requirements in size and in price point. As soon as we start making additions, it ends up doing a couple of things. It greatly impacts the price and all of a sudden the form factor starts growing. You have to find space to fit the bigger displays and WiMAX or WWAN antennas. As soon as you have a good platform and you try to stuff in things that weren’t originally intended to be there, people end up saying, “What happened to the $499 price?” We intended this system for the education market and that market doesn’t require WiMAX. I think we will be disciplined by that. You will see us really trying to drive down the price points, whereas other people might be going in the opposite direction. How big do you think mini-notebook market will get and how big a piece of the pie do you think HP will have at the end of the day? I see it being somewhere between IDC’s forecast of 3 million and Intel and Microsoft’s prediction of over 10 million. The truth is somewhere in the middle. HP, as the number one notebook vendor in the world, will get its fair share of the market.