How to build a better cheap mini-laptop

ATHENS, GREECE -- ASUS shocked the industry last year by introducing a good-enough, tiny PC that had what turns out to have been the killer feature: low price. Competitors scrambled to churn out underpowered, under-priced "mini me-too" laptops. What now?

By introducing a solid, functional laptop for $400 (give or take $150) ASUS humiliated the UMPC crowd, stunned the laptop giants and thrilled dorky cheapskates (including Yours Truly) who always wanted a little laptop they could carry anywhere.

Since then, ASUS -- who was a nobody in the laptop market only to become the industry's 2-pound gorilla -- has been running away with the market, reportedly selling 1 million units in the first five months of its launch and on track to sell more than 3 million this year.

The runaway success of the Eee PC surprised everybody, but companies across the industry are stepping up to introduce cheap and tiny laptops of their own, including a large number of small companies, as well as Acer, Dell, HP and possibly Sony.

With all this new competition, nobody is going to make any money on commodity devices if everyone is building essentially the same device and competing on price. Only those companies who differentiate intelligently will be able to command the margins that might make the mini-laptop trend profitable.

By "intelligently," I mean don't jack up the price by adding features that aren't important to users. Chatter about the addition of touch screens and other relatively exotic features, for example, aren't going to be useful to the majority of people on a device like this. Add features that really matter. What do we want to do with these things? Basically we want to be able to connect from anywhere and get real work done without hassles.

Here's my advice on how to inexpensively differentiate cheap mini-laptops:

1. Build a low-power Wi-Fi finder into the hinge-end of the device. As we carry these devices around town, campus and across the world, we're going to be hunting for connectivity. Make that easy for us by building into the hinge end (the side most likely to be pointing up when we carry it like a book) a Wi-Fi detector/finder that displays network strength, SSID (the public name of the network) and whether the network is secured or not.

2. Figure out crazy-long battery life. Designing laptops is all about trade-offs. For mini-laptops, battery life is everything. It's more important than screen size, chip performance and other factors for many of us. Get the battery right, and make it easy to carry relatively light spares.

3. Build a better keyboard. The biggest complaint with mini-laptops is probably going to be keyboard usability because there just isn't enough room on this size device for a full-size keyboard. However, small tweaks can make a big difference, as RIM learned long ago with cell phone keyboards. Whoever has the best keyboard is going to get the best word-of-mouth among people who type all day, such as bloggers, tech writers and miscellaneous pundits.

4. Partner for auto-syncronization. Partner with a good software backup/syncronization vendor to enable automatic syncronization of user-designated files over Wi-Fi.

There's my short and simple list for how to make money in the cheap mini-laptop market. Post a comment if you agree or disagree!