Intel: Some Netbook resellers saw 30% return rate
Netbooks had a rocky start last year in some markets, Intel's marketing chief said at the Intel investor meeting Tuesday.
"In the first period--June, July, August of last year--there were some in the retail channels that were shipping (Netbooks) as notebooks," Sean Maloney said in a question-and-answer session that was streamed over the Web. "They were running ads that had a continuum of notebooks and had this Netbooky thing in there--it was called a notebook. They had very high return rates and a couple of these guys had return rates in the 30 percent range, which is a disaster."
Maloney continued. "So we gently went back to some of those chains and said if you segment them differently and state up front what they do and don't do, things will be healthier. You've seen some of the European channels saying this (Netbook) product does not do X and being very black and white and very clear."
Intel's marketing chief Sean Maloney showed this slide Tuesday and did a live demonstration showing what a Netbook can't do.
(Credit: Intel)At the investor meeting, Intel demonstrated on stage the performance gap between a Netbook and a mainstream notebook. In the demonstration, a Netbook and a notebook ran the same high-definition video of the NBA basketball playoffs. The video on the Atom processor-powered Netbook was jerky and dropped frames, while the Core 2 chip-based notebook's video was smooth.
The point was obvious: the Netbook's Atom silicon falls short in performing some tasks that a mainstream notebook handles with relative ease.
Along these lines, it also became clear at the meeting that there is a struggle brewing to clearly define to consumers the difference between Netbooks and upcoming ultra-thin notebooks, also referred to as the Consumer Ultra-Low-Voltage or CULV category of laptops. CULV notebooks--due in June--are expected to be priced in a market segment just above Netbooks.
Intel executives were peppered with questions from the audience--mostly representatives from Wall Street firms--about Netbooks. One audience member wondered whether Intel "had considered doing an informational advertising campaign" and asked: "Do you find that at all necessary to clear up some of the misapprehensions about what you can and cannot do with these devices (Netbooks)?" This question elicited the response from Maloney quoted above.
Brooke Crothers has served as an editor at large at CNET News, an editor at Dow Jones' Asian Wall Street Journal Weekly, and a senior editor at InfoWorld. His CNET blog covers chip technology and computer systems, and how they define the computing experience. He also contributes to The New York Times' Bits and Technology sections. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. Follow Brooke on Twitter @mbrookec. 
I think people generally know what they are buying and if the return rate was that high, what other factors led to this? (hardware failure? workmanship? etc..)
I would point out that the article noted that this was some resellers and it was referring to "June, July, August of last year," which is pretty early in the life of the netbook when a lot of people still didn't understand them. The last several times I have walked through a retail store virtually every salesperson emphasized to customers the difference between a netbook and a regular notebook. I can't say that everybody got that message in June of last year. Furthermore, even customers that do get that message tend to have pessimistic views of the pessimism of the salespeople who they view as simply trying to scheme them into buying a more expensive computer than they need.
If netbooks are marketed correctly, with their limitations squarely stated up front, and if there was a highly polished version of Linux like Ubuntu Netbook Remix available, then things go much smoother. Indeed, this is basically how Dell and HP are selling their netbooks now - each continues to offer Ubuntu in slightly different versions.
p.s. I'm not against netbooks, i think they are cool products, and i have sold many to customers who i believe might actually serve their purpose.
"Netbooks had a rocky start last year in some markets, Intel's marketing chief said at the Intel investor meeting Tuesday."
This was at an investor meeting by Intel's marketing chief. If he's not telling the truth, you can file a Whistle Blower lawsuit and retire.
Often times they would come back and complain that the computer was slow and I would reply that I am not surprised while biting my tongue to remind the customer that we told him/her that when they bought their low end computer. I know it is somewhat cliche, but you get what you pay for and a lot of people refuse to accept that.
While a lot of employees working in retail electronics stores are pretty dumb the customers that walk through the door make the idiot employees seem like geniuses. I've encountered customers who couldn't figure out how to plug in a USB keyboard. Say what you will about the idiots that most retail stores purport as trained, but a lot of customers despite admittedly knowing little about the products ignore advice to buy a higher end machine even if it comes from someone who has no stake in the transaction. I remember seeing other customers concur with the salesperson that a slightly higher end machine was a better deal, but the customer still buy the cheap machine.
Smartphones are neat and useful no question about it and they have their purposes, but there is a certain niche of customers where a netbook would make sense. That being said I think due to their low price customers want to believe that a netbook can do more than it really can. While I haven't worked in an electronics retailer recently, even back when I did people had a similar behavior of trying to rationalize a lower end purchase than is ideal for their purpose.
I bought this machine on a whim last year, and somewhat to my surprise it's found its niche. It kinda replaces the morning paper -- it's approximately as portable, only networked. I'd never use it as my primary computer, though, and I don't think I would even if it was ten times more powerful.
I think the return rate may be related to Linux, by the way. If you're expecting Windows, it'll be a bit of a shock, especially the rather ugly and Spartan variants usually factory-installed on these things.
Game consoles are gaming optimized PCs. They don't ship with windows or Linux. When you turn them on, it's clear that they are gaming machines. Netbooks need that kind of optimization or they will fail. The device companies built cost-reduced laptops and called them netbooks but nobody thought about optimizing the software. BIG mistake. BIG! Maybe even big enough to kill the category if they don't react quickly. Right now, Netbooks are being perceived as crappy laptops, not as Web optimized browser devices. BIG mistake. BIG BIG BIG!
If netbooks shipped with a smartphone OS (e.g. Android, Symbian, WinMo, etc.), included smartphone hardware (3G, GPS, accelerometer, compass, touchscreen, etc.) and supported cell phone calls, consumers would view them as a smartphone with a larger keyboard & display and adjust their expectations to that.
Certainly some people who just do basic things (email, web browsing, etc.) could use it as their only machine, but most people would still have a more powerful notebook/desktop, to do desktop-type things.
Then, have every media outlet between here and moon continuously spout off about how cool they are.
And you will have a lot of people buy one with unrealistic expectations.
I started to even believe these things might be useful, but 10 mins of playing with one reminded me that I like big screens and fullsize keyboards combined with hardware that can run all of my applications, not just my browser and email clients.
I'm am expecting our first netbook computer by FedEx before the end of this week. We got it as a promotion with the new laptop I bought myself this past weekend. The laptop is going to be the most powerful hardware I've ever owned, 2GHz quad core CPU with 8GB of memory. I expect this laptop will never actually run sitting on my lap, not without insulation between it and my legs anyways.
But we started shopping for a new portable computer because my wife's five year old laptop is beginning to fail. I was expecting to shop separately for a laptop and a nettop before serendipitously finding the nice package deal. The reason? For the last 5 years, the only thing my wife has ever done on her computer: read email and browse the internet.
But I agree, with many statements that many customers either through their own optimistic expectations or misinformation have gotten something that did not meet their needs.
These netbooks are a bigger possible market than Sony's PSP, or even the Kindle, if they are done right.
By this time next year, I expect netbooks will be likely in every home. It's the perfect school sized device too- not heavy like larger laptops and still as a good keyboard to keep up with note taking. Heck, you can even record a lecture if you really want to with the on board microphone or webcam.
If/when Apple releases one, it will be more expensive than the rest, but should still be affordable. The danger to this is that it may cannibalize sales of their entry level notebooks. It's a tricky area for them to deal with. There's obviously a lot of money to be made in that market and to ignore it is to lose out entirely.
- by mailbox001 May 13, 2009 2:27 PM PDT
- I got my wife a Dell Mini 9 a few months ago and she loves it. She uses for college work, mostly Internet, email and Word. But she doesn't have any issues with it. She knows it not as powerful as other laptops, but for her situation and the small size, its perfect.
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