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Virtualization Expo - Dell Unveils its Nettop
Dell Now Has What HP and Asustek Already Have

Dell Thursday finally trotted out its widely anticipated nettop, giving it what HP and Asustek already have.

Dell calls its 1.6GHz Atom-based widget the Inspiron Mini 9 and is selling the thing at www.dell.com in the US, Canada, Japan and some European countries starting at 399 with XP Home.

Besides Dell, Vodafone will be selling the nettop exclusively in Europe with mobile broadband.

Other than XP Dell says it will have Ubuntu 8.04, its choice of Linux, on the thing for $349 in a few weeks.

The Linux version has only 4GB of solid-state memory to the Windows version’s 8GB. Both have 512MB DDR2.

A high-end Windows-only model that goes for $449 has 1GB internal and a 16GB drive.

Dell is already offering rebates of $40 or $55 on the Windows models.

It’s promising a custom Dell Linux interface that’s supposed to make it easy to find what you’re looking for. It says “intuitive icons link directly to groups of similar applications, like games, web and entertainment, and favorite web links for quick access.

The 2.28 lb device comes with an 8.9-inch 1,024x600 LED and Wi-Fi; a webcam bundled with Dell Video Chat and Bluetooth can be added.

Dell has teamed up with Box.net so users can store, share and edit photos, videos, music and documents on the Internet, effectively making the thing a cloud device. Dell is including a free Basic plan with 2GB of OpenBox remote storage space, expandable to 25GB.

The gismo comes in black or white.Gartner is predicting that the industry will ship 5.2 nettops this year, eight million next year and 50 million in 2012.

What the cheap mainstream-directed little box will do to or for Dell’s already beaten-down operating margin, now 5.3%, is anybody’s guess.

Late last week right before the long holiday weekend the company turned in a disappointing Q2 earnings statement that precipitated a sell-off and a ~14% drop in Dell’s stock, its worst plunge in eight or nine years, because profits dropped 17% to $616 million, or 31 cents a share, on sales up 11% to $16.4 billion, 17% of which is attributable to retail where it has to compete for space and faces new promotion costs.

Dell, which admitted to cutting PCs prices to buy share to fuel its turnaround – something Michael Dell called an “imprecise process” – said tech spending was weak in Western Europe and parts of Asia as well as the US, a trend reinforced by IDC although HP hasn’t complained.

A strengthening dollar is also having an impact.

According to reports, 30%-40% of high-tech revenue growth the last few years has been due to the weak dollar.

Dell, which said its pain was “self-inflicted” by being too aggressive in parts of its business, particularly, it seems, in laptops in EMEA, said its earnings performance the next few quarters would be ragged or what Dell calls “non-linear.”

Observers say price is Dell’s only weapon and note that, unlike HP, it is dependent on moving hardware.

The news set off a general rout in tech stocks.

Before the deluge, Dell’s stock was up 33% since April.

About Maureen O'Gara
Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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