The netbook trend

February 27th, 2009 • 4 comments
Tags: Hardware, laptop, netbook, netbooks, notebook computer, subnotebook

Netbooks have reached an amazing level of popularity in a very short space of time. In 2008, the netbook saw a 3,000% increase in sales over 2007. In the third quarter, netbook sales even outpaced those of the iPhone. To the average consumer, the choice is a simple one: I can go with a 15″ laptop for $600 or a 9″ netbook for $300. However, many netbook buyers are now learning that comparing a netbook to a notebook is not apples to apples.

In two years, the netbook will be another technology we look back upon and laugh like physics cards. The dominoes are stacked and ready for the fall. Here are the problems:

The original idea behind netbooks is that they would work primarily with web-based applications. This explained away concerns about low-speced builds. However, this was evidently a barrier for consumers who wanted to continue working with their desktop applications which require both processing power and memory to support the application along with storage space to keep saved documents and files. The evidence: manufacturers found soon after releasing the netbooks with Linux-based operating systems that users demanded the Windows-based operating systems instead. It also happened that Microsoft, no doubt feeling threatened by the growing popularity of a subset of computers incapable of running Vista, decided to resurrect Windows XP for distribution on netbooks. The web is virtually identical from Windows to Linux. Sure, people hate change no matter how small, but it seems to me that if users buy these machines with the expectation that the applications they are using are going to be primarily web-based, it wouldn’t be an issue. Also, the meager SSD offerings were seemingly insufficient as almost every new netbook coming out ships with a traditional hard drive. Why do I need 160GB hard drive to store my data in the cloud?

The processor, already a meager 1.6GHz, is throttled back to 500MHz for power savings. I’m all for power savings, but this seems a little extreme. Certainly road warriors will appreciate the longer battery life, but this comes at a great performance cost. It seems that much of the battery life gain will be utilized waiting for applications to load and complete processes.

To steal a phrase from Peter Rojas and Ryan Block of the gdgt podcast (who, I think, stole the phrase from someone else), netbooks are a race to the bottom. There is tremendous downward price pressure in this hardware category. This is great for the consumer… up to the point at which manufacturers can no longer offer lower prices for the hardware. At this point, they begin to explore more devious ways of externalizing the cost of these notebooks. You may remember the days of cheap computers with an AOL or CompuServe contract. Well, those days are back in the form of cellular data contracts. Who can resist a $99 computer with a two-year Verizon contract?

As consumers demand more from netbooks, the definition becomes muddied. We are already seeing netbooks in 10″ and 12″ configurations blurring the line between netbook and notebook. SSD has been mostly scrapped in favor of standard hard drives. Other manufacturers (I’m looking at you, Sony.) are releasing netbooks that they refuse to call netbooks in order to break out of the restrictive price constraints.

Ultimately, the problem is a misconception about what a netbook is meant to be. The netbook is really targetting geeks who already have a desktop, already have a real laptop (for doing real work), and want something to fill the gap between. Even this is a problem since most of these geeks have smartphones that are slowly becoming more and more capable of basic web-based tasks. The general populace sees this thing that looks like a small notebook and is offered at an attractive price. They believe it must be a notebook computer. Strictly speaking, it is, but it isn’t the workhorse a traditional notebook can be. This misconception leads to lots of sales on the frontend to average users who think they are getting a bargain, but it will not be sustainable as they recognize their error. An alternate scenario is that netbooks will slowly creep in price and performance to the point they are indistinguishable and thus will cease to exist. Either way, stock up on those cute little netbooks while you can. In 18 months or so, they may be much more difficult to find.