For more than two decades, personal computing has been anything but inexpensive. To be sure, prices for the average computer have dropped substantially since the 1980s. But with the exception of the occasional bargain or bare-bones configuration, the price of a good computer system still takes quite a bite out of the family budget.
That iron calculation no longer applies and shoppers can now find low-end systems in the $300 range running Celeron or Sempron processors. But the more intriguing development is the emergence of Intel's Atom chip and what it might suggest about the Netbook's ability to one day replace a traditional desktop or notebook as a family's primary personal computer.
By itself, the Atom (as well the expected arrival of a similar chip from Advanced Micro Devices one of these days) probably won't be enough to compel a huge change in consumer behavior. (Though since the Eee PC's debut in late 2007, about 12 million low-cost Netbooks have been sold.)
The Atom's fortune is to arrive at a particular juncture in the history of technology and the global economy as several trends are working simultaneously to its benefit, as pointed out recently in a convincing paper by Bernstein Research's reliably excellent Toni Sacconaghi.
• The recession: Stimulus or no stimulus, the global economy is going to need months to repair itself. Against the backdrop of growing joblessness on the rise and financial insecurity, families are looking twice and three times at discretionary purchases, like a PC.
• Free software: Microsoft long ago lost the perception fight around open-source software. Now with the emergence of Ubuntu, the idea of Linux on the desktop isn't the pipedream it was at the start of the decade.
• Cloud computing: Not everything will reside in the cloud but Web-based computing increasingly dominates what we do in front of the terminal. If all you need is a good data connection, there's less rationale for paying top dollar to buy a fancy computer. You don't need a top of the line machine to access YouTube.
• Fresh technology and the "cool" factor: Admit it, we're all fashion whores when it comes to tech toys and Netbooks are a hip item these days, especially compared with the frumpy Celeron and Sempron boxes they compete against.
Ubuntu man: Mark Shuttleworth
(Credit: Mark Shuttleworth)I can hear the objections already. What about gamers or advanced photo editing or video encoding? Fair enough, but that still doesn't account for more than half the population of consumers for whom Atom-based systems are more than enough. Sacconaghi points to a Pew Internet & America Life Project in December, which found that "38% of adults (roughly 75% of the gaming population) reported using their desktop or notebook PCs for gaming." And while it's true that high-end hardware offers richer capabilities, the fact is that most people don't do heavy-duty photo editing or video encoding.
The wild card here is Canonical, the company which puts out Ubuntu. Until Ubuntu, there was little to the argument that mainstream computer users would load Linux onto their machines. On paper, it sounded great but it never worked out in practice. Simply put, people have lives to live and don't have the time or the inclination to immerse themselves in learning a new operating system.
But I like what Mark Shuttleworth, has done with Ubuntu since he founded Canonical in 2004. Not only is it relatively easy to use but Ubuntu is compatible with Microsoft Office. Unless I'm terribly mistaken, more developers will pick up on that over the next year. Especially if this recession-depression drags on.
Writing about the Tuesday introduction of new iPods by Apple, American Technology Research's Shaw Wu observed that the product debut came smack in the midst of a lousy economic cycle where "macro headwinds are becoming more apparent."
That qualifies as more than mild understatement.
Atom: Let's get small.
The economy's wheezing, big banks are collapsing and oil prices remain sky high. So then why is PC demand expected to be strong through the end of 2008--and beyond?
That's the gist of a new report out of IDC. No matter that Lehman's on the ropes or that Uncle Sam had to rescue Freddie Mac and Fannie Mae before they went insolvent--and the financial sector is a big consumer of IT products. IDC still projects that global PC shipments will grow nearly 16 percent this year and remain at a double-digit pace through 2011.
And the No. 1 reason, according to IDC: the low end of the portable business is super-hot. I suppose the explanation isn't rocket science: when the economy's hurting, who doesn't want to find a bargain?
One other nugget in the IDC report caught my eye: a nascent trend marked by increasing "form factor diversity" in notebooks. The upshot is that with prices dropping, you'll find more people who own several different computers.
And when it comes to inexpensive notebook computer, we're primarily talking about Atom-based machines. Though it's unclear how long Intel will have this business to itself. Dirk Meyer, who now runs Advanced Micro Devices, recently acknowledged that the company also has its eyes on the ultra-low-cost notebook market.
One person who lives and breathes this market is my gadget-loving colleague, Erica Ogg, who explained the pros and cons of the latest notebook computer technology during a segment we recorded Wednesday on the CNET News Daily Debrief. Check it out.
It's hard to remember the last time I bought a desktop computer. Sometime back in the stone age, I suppose, when vendors still bundled the machines with CRT screens.
(Credit:
CNET.News)
My back-of-the-envelope tally of friends and colleagues turns up the same taste trend. Few say they plan to spend money on desktops any more. Those who do say it's because they need the bigger computer for serious gaming applications. I hang with a crowd of early adaptors, but it's not just the predilections of the double soy nonfat latte crowd. Now the statistics are starting to bear out the anecdotal evidence.
One of the big surprises out of Intel's second quarter numbers is that for the first time, demand for notebook processors outstripped the company's product sales for desktop machines. Everyone expected this would happen one day, but the future just got here a lot faster than most folks--including Intel--ever assumed.
And that occurred even without big sales of Atom processors, which Intel debuted in the second quarter. These chips are geared for what Intel describes as Internet-centric "netbook" and "nettop" alternatives to current notebooks and desktops. Truth be told, though, it's still not clear how much impact Atom will have. Witness CEO Paul Otellini's seeming putdown of his own product: "(Atom) is less than a third the performance of our Centrino (processor). You're dealing with something that most of us wouldn't use," he said.
But enough computer shoppers, here and abroad, will be buying increasing numbers of these and other notebook computers. The second-quarter news Intel reported about notebook sales was not an anomaly. The trend will continue until the popularity of notebooks get eclipsed by even smaller devices. None of this suggests that the curtain is about to close on the era of big desktop PCs imminently. But "Let's get small" has become more than just a mantra for the future. It's now the present.
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