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Toshiba and Gateway are early participants in the growing cavalcade of Netbook makers expected to stretch across the exhibition floor at the Consumer Electronics Show.

New Toshiba Netbook packing Intel 'Pine Trail' silicon.

(Credit: Future Shop)

These Toshiba and Gateway listings at a Canadian reseller follow Hewlett-Packard's leak of its iMini 210 Netbook specifications. All three models from HP, Toshiba, and Gateway are based on Intel's new N450 silicon, aka "Pine Trail."

The Toshiba and Gateway models both appeared on the Canadian reseller Web site Future Shop and both have similar configurations: the 1.66GHz Atom processor, 160GB (Gateway) or 250GB (Toshiba) hard disk drives, a 10.1-inch screen, 1GB of memory, and an Intel "GMA 3150 Express" graphics chip.

And both systems come with the Windows 7 Starter edition operating system.

Pricing is where the two Netbooks part ways, however. The Gateway Netbook is listed at $299 Canadian, or about $285 U.S. Toshiba's Netbook is listed at $459 Canadian, or $438 U.S.

New Netbooks aren't the only laptops expected to make a splash at CES, which starts Thursday. Full-fledged laptops have leaked already from HP, Toshiba, and Gateway that use Intel's new Core i3 mobile processor.

It's been a hot year for Netbooks, but not so much for the rest of the portable PC market.

Netbook sales are likely to hit $11.4 billion this year, a 72 percent rise from last year, thanks to a 103 percent leap in shipments, according to a new report from DisplaySearch. But notebook revenue overall will be down around 7 percent from last year.

The latest DisplaySearch Quarterly Notebook PC Shipment and Forecast Report, released Tuesday, found that the surge in Netbook (mini-notebook) sales was not enough to offset declines for ultra-portables and larger laptops. Aside from Netbooks, annual revenue will likely be down in every portable PC category.

Though notebook shipments are expected to grow 5 percent for the year, average selling prices (ASPs) will show a 20 percent drop as vendors have slashed prices throughout the year, DisplaySearch has forecasted . Average prices for Netbooks and 13-inch to 16-inch notebooks will probably be down 15 percent for the year, a significant cut as these two categories make up 85 percent of the overall notebook market.

(Credit: DisplaySearch)

For 2010, notebook shipments will rise by 16 percent, predicts DisplaySearch, thanks to better than average gains in Netbooks and ultra-portables. The CULV (Consumer Ultra-Low Voltage) market will drive growth with an array of new 11.6-inch and 12-inch portables sporting prices under $500. However, sales next year will likely be flat or down for most portable segments, except desktop replacement, which should enjoy growth of 21 percent over 2009.

The popularity of Netbooks may start to fade next year, DisplaySearch said. Shipments could rise 20 percent, but sales will flatten, and then drop in 2011 as prices come down and performance goes up for ultra-portables and larger notebooks.

(Credit: DisplaySearch)

"Our long-term outlook is that the mini-note share of the notebook PC market has stabilized, and will remain at approximately 20 percent through 2011 before starting to erode," said John F. Jacobs, DisplaySearch director of Notebook Market Research, in a statement. "While mini-notes offer lower ASPs and are thinner and lighter than notebook PCs, the performance of larger notebook PCs continues to improve while prices continue to steadily decline, increasing the performance gap while narrowing the price gap."

As Intel and PC makers prepare to launch an app store for Netbooks in 2010, the emphasis is on speed.

"We have a lot of developers right now jumping all over this and writing apps and getting them ready," Scott Apeland, director of Intel's Developer Network, told CNET Wednesday. "Today, you can actually submit applications and get them in validation and be one of the first in the store when we have that available next year. We don't have specific dates. It's how fast we can get it up and ready."

Intel Atom Developer Program

(Credit: Intel )

How fast? "The whole program is moving extremely fast. Now we're working frantically on getting the store ready," he said.

The store itself will come preinstalled on future Netbooks, according to Apeland. "We're working with OEM partners (PC makers) now to get this ready and preinstalled on systems. So, when a user purchases it, he just runs the app store...and pulls from a catalog of applications that are available and they can make the purchases right there," he said.

The largest suppliers of Netbooks using Intel's Atom processor are Hewlett-Packard, Dell, Acer, and Asus--all of which are readying the next wave of Netbooks based Intel's new "Pine Trail" Atom technology, expected to launch sometime this month. It's a hot market: Intel said Wednesday that more than 50 million Netbooks are expected to be sold by the end of 2009.

Though most applications are expected to be written for the Linux operating system--Intel's version is called Moblin--Apeland claims that the program has a wide target.

"The Atom Developer Program doesn't favor one OS over another, and at its core, the program is meant to facilitate development across multiple OSes," he said. "Right now it's Windows and Moblin...we plan to expand support to different run-time environments, including Adobe AIR and Microsoft Silverlight."

Apeland said that Intel's software developer network overall has between 700,000 and 1 million monthly users, and 20,000 independent software vendors (ISVs) who are members of the Intel software partner program. Though Apeland couldn't say how many of these developers are doing development specific to Atom-based Netbooks, he did allow that Intel has had "tens of thousands coming and checking out our site (and) thousands actually joining before we had any (software development kit) or tools available."

The developer will get 70 percent of the revenue from the sale, Apeland said--similar to the Apple app store. "The rest (30 percent) will cover operational costs and partner costs that are involved." Intel announced a beta of a software development kit on Wednesday for Atom processor-based Netbooks.

Apeland also discussed the type of applications that are popular. "For example, social networking, on-line chats, sharing of photos, video. I think there's going to be a lot of innovation around that," he said, adding that development will also target "a way so users don't have to worry about--keep track of--different sites for log-in."

On the education front, Apeland said, "the Netbook has a lot of natural opportunity because of the keyboard and screen size versus a small handheld device."

The "smartbook" aspires to put the smartphone into the laptop. Will it be able to elevate an Apple iPhone or Motorola Droid-like experience to a larger device, or is it just more marketing mumbo-jumbo?

Two companies are hoping that the smartbook will turn out to be more than just another quickly-forgotten device sales pitch. Qualcomm and Freescale, which are both supplying key silicon technology for the devices, are pushing to make smartbooks different enough from laptops--and Netbooks--that consumers will take notice.

Qualcomm CEO Paul Jacobs holds the Lenovo smartbook, which will appear at CES in January.

(Credit: Qualcomm)

The first tangible evidence of smartbooks to come will be seen at the Consumer Electronics Show in January, where Lenovo, among others, is expected to show, if not roll out, smartbook designs.

One pesky question won't go away, however. Why go out of the way to call it a smartbook? Doesn't Netbook suffice? (And it can potentially be very confusing for consumers since both terms have "book" in them.) On one level, the nomenclature choice is simply to counter the Microsoft-Intel Netbook juggernaut: Another Netbook among dozens already on the market won't draw much attention.

But at a deeper level, the two companies are trying to make the smartbook substantively different from a Netbook. Qualcomm sees it, in essence, as a large smartphone, which leaves the outdated Windows desktop experience in the dust. "A Netbook in our view is just a cheap laptop that runs Windows. We see the smartbook cannibalizing the Netbook. ... Read the full post at CNET's CES 2010 blog

ARM on Tuesday announced the launch an alliance of 35 tech companies to support development of Android-based products using its widely used chips.

ARM-based chips power the world's most popular smartphones, including--in the U.S.--the Apple iPhone, Blackberry Storm, Palm Pre, and Motorola Droid.

The Solution Center for Android alliance will serve as a resource for designers and developers of ARM technology-based products running on the Android operating system, which is the software on the popular Motorola Droid smartphone and Acer Liquid.

In addition to smartphones, Android powers digital picture frames and smartbooks--what the Windows-Intel camp prefers to call Netbooks. ARM-based smartbooks packing processors from Qualcomm, Freescale Semiconductor, and Texas Instruments should begin to emerge in force at the Consumer Electronics Show in January, where Lenovo, among others, will debut its first-ever smartbook design. The Lenovo smartbook is expected to be sold by AT&T.

"Developers require assurance that the components they are using are up to the task," ARM said in a statement. "Android was written for the ARM architecture and Android 2.0 was launched on high-performance (ARM) Cortex-A processor designs."

ARM says the launch of popular products is putting new pressure on the ecosystem that supports ARM. "As we have seen through the recent launches of handsets such as Motorola's Droid and Acer's Liquid, the Android platform represents a fundamental change in the open source ecosystem," Kevin Smith, VP of segment marketing at ARM, said in a statement.

Smith says that ARM now needs to ensure that development solutions are world-class. "ARM is in a position to foster an innovative ecosystem to ensure that device manufacturers have the best development solutions at their disposal," he said.

Analysts agree. "Consumer adoption of smartbooks, smartphones and other 'always on' connected devices is forecast to increase significantly in the next few years," Jeff Orr, a senior analyst at ABI Research, said in a statement provided by ARM. "Manufacturers of these devices need a support structure that enables them to develop cutting-edge devices quickly and affordably."

ARM said that in addition to the support of major device makers, silicon partners and solution providers, the Solution Center for Android comprises more than 35 members of the ARM community, including Texas Instruments, Mentor Graphics, and Archos.

Updated at 9:30 a.m. PST: Clarifying that "Netbook" is the name that the Windows-Intel camp gives to the small laptops and "smartbook" is the moniker applied by the ARM camp of device makers.

I'm going to break from the well-established tradition of comparing Netbooks to notebooks. This time my yardstick is going to be the smartphone. And no better yardstick than the Apple iPhone.

Verizon is selling Netbooks as kind of an upscale smartphone

(Credit: Verizon)

This post updates a year-old piece (which, by the way, at least one writer took exception to).

As the holiday-shopping season approaches, many consumers face an ostensible choice between an inexpensive Netbook or more expensive notebook. I personally face that choice (or, at least, I thought I did).

Let me state up front that though I have used Netbooks on a temporary basis, I have never owned one.

I (now) believe that Netbook comparisons to mainstream laptops (which will always disappoint because Netbooks are slower, screens smaller, keyboards more cramped--and this list of comparative shortcomings is long) is really the wrong way to look at it. Let me illustrate.

I recently interviewed the chief technology officer for a large school district in Louisiana that had purchased a lot of Netbooks. And I asked what I thought was the most pertinent question: weren't performance and screen size a concern? She quickly pointed out that my perspective was all wrong.

In short, students in K through 12 are accustomed to iPhone-size screens and performance. So moving to a Netbook is a big step up. From this perspective, the screens are large, the keyboards expansive, and the performance more than adequate.

This suddenly made a lot of sense to me because of my personal experience. Take the iPhone 3GS (or Motorola Droid or BlackBerry Storm, take your pick ). To state the obvious, in many respects, this is a personal computer platform for e-mail, texting, Web surfing, music, navigation, YouTube, and the list goes on.

In other words, the iPhone is for consuming data and media as well as light production. Like the Netbook. But the Netbook, obviously, takes this to the next level. It adds a keyboard and a larger screen, which also makes it potentially a better production platform. So, it's an iPhone Plus, if you will.

And here's the real proof in the pudding. Where do you see Netbooks being sold these days (think Nokia Booklet)? At phone carriers, like Verizon. The last time I visited a Verizon store, it had 3G Netbooks prominently displayed right next to the Motorola Droid.

The point seems obvious to me now. Want to be more productive? Step up to a Netbook. And this follows the same logic of the CTO at the Louisiana school district. And upcoming tablets and media pads from Apple and others will also be marketed as a high-end iPhone-like device, in my opinion.

So, in the next month or so when I try to sort out which Netbook to buy (This CNET review says the HP Mini 5101 is one of the best Netbooks on the market now), I'll be shopping for an upscale smartphone not a stripped-down notebook.

NOTE: I'm not suggesting that anyone replace their iPhone with a Netbook. My point is that a Netbook can be used as an inexpensive adjunct to an iPhone or Droid for people who need to be more productive than an iPhone (or Droid) would allow.

The settlement between Intel and Advanced Micro Devices isn't just a matter of business between companies.

Sure, it's a big financial deal when the biggest chipmaker in the world forks over $1.25 billion to its closest competitor. And the settlement, announced Thursday, officially puts an end to a five-year battle over licensing disputes and AMD's complaints of unfair competition.

Beyond that, there will also be an effect on the two chipmakers do business with PC makers, and how they price their chips. Still, the settlement won't likely foment major changes for consumers shopping for a new laptop or desktop.

Choice
AMD processors are readily available from most PC makers, the major exception being Apple. If you really wanted one before the settlement came along, it's not like you couldn't get an AMD-based machine in stores or online. Intel now has agreed basically to not punish PC makers that choose to put AMD chipsets in some of their machines, but that doesn't mean Hewlett-Packard, Dell, Acer, Apple, and others will suddenly want to use AMD's latest chip in their flagship products. AMD will probably continue to be used as the "value" option for PC makers looking to offer cheaper notebooks.

PC prices are already pretty low thanks to the Netbook movement brought on by Intel, Acer, and others.

(Credit: Acer)

That said, there is room for AMD to increase its share in processors used in laptops. The company has made improvements in that area recently, particularly in the ultrathin category, according to observers. So if you're paying attention, you might see more from AMD when shopping for a new laptop.

Prices
My colleague Brooke Crothers made an excellent observation last week, that Intel, while accused of dampening competition with AMD, has actually kept prices very low for consumers buying laptops. Thanks to the Netbook movement, which Intel spurred with its Atom chip starting in late 2007, the average price of the small, lightly featured Netbooks is now below $500. While not everyone is in the market for a Netbook, all shoppers have ended up benefiting. In order to recoup some of the lost profit due to the popularity of Netbooks, the industry--led by AMD and its consumer-ultra-low-voltage chips--has now focused on selling ultrathin laptops, which typically cost somewhere between $500 and $900.

Though one might assume that Intel and AMD hitting reset on their competition and going head to head would bring prices down, that's not likely. If anything, prices may actually go up a bit, said Gartner analyst Martin Reynolds.

"This [settlement] potentially means that products cost a little more to manufacture because we don't have this irrational competition between the two," he said. "[PC makers] won't be able to pit the two against each other as much."

Speed to market
What matter to consumers most are price and capability. What matters to Intel and AMD is getting faster, cheaper processors that enable better battery life in laptops into as many new computers as possible. The speed of this cycle is very important. The faster the two companies come out with new products, the more often people will go shopping for new laptops.

AMD's product road map has severely suffered in comparison to Intel's over the last several years. Intel whips out new products on a regular yearly schedule. A quick infusion of $1.25 billion from Intel should do a lot to help AMD fund new product design in order to better keep up. Again, there won't be a significant change immediately, but over time we may see their speed to market pick up, Gartner's Reynolds noted.

Besides money, the end of the legal squabbling also means that AMD is freed up from focusing on the lawsuits and what Intel has done wrong, and can help the company focus on the task at hand: making good products at reasonable prices. So if not directly, the settlement will at least indirectly benefit those looking for laptops and desktops at their local retailer or online.

Of course the vast majority of shoppers, outside of those tuned into technology, probably won't pay much mind to whether there's Intel or AMD inside the laptop as long as it meets their expectations, said analyst Michael Gartenberg.

The buying decision is actually very simple usually, he said. "Does it even matter anymore? It's about who's delivering the cool machines at the price that I want."

Acer recently outpaced Dell as the second largest PC seller in the world. Is No. 1 Hewlett-Packard next on the list?

Acer Chairman J.T. Wang reportedly intends to ship 40 million notebooks in 2010, a number that could help the Taiwanese company challenge and even overtake current champ Hewlett-Packard for the top spot in portable PC sales.

To achieve this goal, Acer is looking to kick up revenue by more than 70 percent over the next three years, said Wang in an interview with Reuters.

Credit: Acer

J.T. Wang

Much of that revenue growth is likely to come from an anticipated 50 percent gain in sales for low-cost Netbook PCs. As the economy improves, Wang expects to sell an ever greater number of low-priced, portable PCs, a segment that has been very kind to the company.

As chairman since 2008, Wang has led Acer as its sales and market share have shot up over the past year. And with revenue expected to hit $18 billion this year, he's already targeting the next milestone.

By not coughing up a low-cost MacBook, as some had expected, Apple has ceded a potentially huge market to PC makers. But is this just all part of Apple's marketing genius?

$999 is as low as Apple will go.

(Credit: Apple)

The announcement Tuesday of the $999 white polycarbonate MacBook was pretty ho-hum as product refreshes go (same price, same color as before) but the implication was important: Apple is surrendering a large, emerging laptop market to Microsoft and its coterie of PC makers.

Not that it's necessarily a bad strategy. Market researcher Gartner said recently that Apple's shipments in the U.S. grew year-over-year by 6.8 percent to total 1.57 million during the third quarter, putting it right behind Hewlett-Packard, Dell, and Acer. Comparatively, overall PC shipments in the U.S. grew by 3.5 percent from a year earlier.

But among those unimpressive overall PC numbers (HP's third-quarter shipments grew only 2.7 percent), was an impressive statistic for Acer: buoyed by Netbooks, Acer's shipments grew by 61.4 percent year-over-year, and it blew past Dell to become the No. 2 PC maker worldwide based on this growth.

Granted, Netbooks are a relatively low-profit segment (i.e., profit on a $400 Netbook is going to be a lot less than that on a $999 laptop). Nevertheless, they're a hot market. Intel CEO Paul Otellini has stated numerous times that Intel was able to create a market that grew faster than either the iPhone or Nintendo Wii. Case in point: Windows 7-based Acer Netbooks are now big on the Home Shopping Network--which claims to have sold more than 5,000 in one segment on Saturday.

And that's not the only market Apple is punting on. A new category of inexpensive, thin laptops has emerged with the roll-out of Windows 7 on Thursday. Like Netbooks, these laptops are light (typically 4 pounds) and don't include an optical drive. But they are relatively powerful and full featured. The 15.6-inch Acer Aspire Timeline, for example, with a 320GB hard disk drive and dual-core Intel processor is fairly well-endowed at only $500.

Apple is not receiving a lot kudos in the mainstream business press ... Read the full post at CNET's CES 2010 blog