Asus expected to ship 2M Eee PC's in the first half of 2008 - however it has only shipped 1.7M units.

Some people think the shortfall is due to a shortage of the Atom processor - personally I think it is due to Asus slowly pricing itself out of its intended market. The Eee PC 701 was announced last year with great fanfare for a $199 price point with 4GB SSD and webcam - when it finally went on sale, that configuration would set buyers back $399, with a 2GB no webcam version being the $299 option.

The Eee PC 900 was briefly on the market before the Atom showed up, and is now subject to a $100 rebate - bringing its $549 price tag down to $449.

The Eee PC 901, which is a nice little unit, lists for $599 with XP - and while it is very portable, $599 will buy you a much bigger screened much more powerful laptop at BestBuy - or anywhere else.

I think had they brought out the Eee PC 901 at $399 they would probably have significantly exceeded their sales targets; and would have at least met targets if they brought it out at $499.

You can't really blame Asus for trying to maximize the profit per unit, and market forces will bring their prices under control soon - with the Acer Aspire One coming in at less than $400, Asus will be forced to cut prices.

That is why I am confident that Acer Taiwan president Scott Lin is right to be confident about the Aspireone enjoying strong sales - the aggressive pricing and feature set severely undercuts the price of the Eee PC 901 and will no doubt take significant market share from it - and if they continue to keep the prices low, he may even reach his target of 5-7M units sold in the second half of this year.