I disagree. Sure price/performance ratio is only going to get better. However, there will always be high end, low end and stuff in between.
After all, the equivalent of Pentium II with 64MB of RAM and a basic video card can be had for next to nothing today, but nobody wants it, because it will not run latest Linuses or Windows XP smoothly and dealing with 8-10-12 megapixel photos from your camera will be slow as hell on such PC, I am not even talking about video or modern games.
In the end, people want software. It is always about the software. It's always about creating value - if "next Vista" delivers something that everybody wants, and it will require $1K hardware to run, it will be tough to sell $400 laptops. People have been overpaying for Apple hardware for ages, because those computers ran Apple software and they wanted it.
Haven't you heard this conversation before: "You should by X. Really? But will it run Y?"
There will always be a high end, but the truth is that, especially when it comes to electronics, the average person can't tell the difference. Of those that can, only a given percentage will pay for that difference. And as a technology matures, you will always have increasingly diminishing returns as price increases. Just a couple days ago, I overheard someone comment that they can't really tell the difference between an HD and SD broadcast. While most people aren't that bad, try getting the average person off the street to be able to tell the difference between a Pioneer or Hitachi TV and a Vizio, or the resulting pictures taken from any halfway decent digital camera. Every niche has its own set of hackers, but they're almost always vastly in the minority.
I think there is a fairly small set of things a $400 laptop has to do to be succesful - handle digital cameras, surf the web, play mp3s and run a good office package. Mpeg's and dvd's might be in there as well.
After all, the equivalent of Pentium II with 64MB of RAM and a basic video card can be had for next to nothing today, but nobody wants it, because it will not run latest Linuses or Windows XP smoothly and dealing with 8-10-12 megapixel photos from your camera will be slow as hell on such PC, I am not even talking about video or modern games.
In the end, people want software. It is always about the software. It's always about creating value - if "next Vista" delivers something that everybody wants, and it will require $1K hardware to run, it will be tough to sell $400 laptops. People have been overpaying for Apple hardware for ages, because those computers ran Apple software and they wanted it.
Haven't you heard this conversation before: "You should by X. Really? But will it run Y?"