There's a bit of an anti-Netbooks meme making the rounds in blogs and on Twitter and the expected push-back from their fans. From where I sit, this is fueled partially by the conflating of product and product category, partially by competitive sniping, and partially by genuine consumer confusion. Let me try to tease those threads apart.
I've been skeptical from pretty much the beginning that there was a bright line distinction between Netbooks and other inexpensive, small form-factor notebooks. And it's this lack of a truly standalone category that analyst Michael Gartenberg is writing about in his provocatively titled "Netbooks R.I.P."
"What's in a name?" Shakespeare asked, adding "a rose by any other name would smell as sweet." While some perceive the netbook as a new product category -- a class of device that's never existed -- I would have to beg to differ. A netbook is merely a laptop with the pivotal axis based on price first and foremost... Sure, my price-oriented definition might sound heretical to those who view the netbook as an ode to cloud computing, ubiquitous usage scenarios, and freedom from Microsoft OS tyranny, but that's not how the market has shaped out.
The current generation of Netbooks tends to have certain defining characteristics--specifically Intel Atom processors and the Windows XP (or Linux). But, as Gartenberg notes, a 7-inch screen also used to be a defining characteristic. Now many Netbooks come with 10-inch screens. Come Windows 7 and future processor generations from Intel (and AMD), I expect any clear distinctions that exist today to rapidly blur.
That's not to say that analysts and product managers won't create a bucket for small, price-focused notebooks. They may call that bucket "Netbooks." They may call it "Value Ultraportables." They may call it "Fred."
IT industry people like to chop markets into named categories for reasons of their own, even if as a fellow analyst said at a recent meeting: "the average consumer calls everything a laptop anyway."
One reason that the nomenclature fight around Netbooks is more intense than such battles tend to be is that the distinction between Netbooks and other ultra-portable notebooks is also a fault line in a competitive battle between Intel and AMD.
For Intel, Netbooks have been the big product category win for its Atom processor. (If a somewhat serendipitous win. Atom was originally more focused on a new class of "Mobile Internet Devices" (MID), a product category that so far hasn't taken off.) For its part, AMD has focused on an incrementally higher price and processing power point with its Athlon Neo platform (found in the HP dv2).
As a result, it's in Intel's interests to promote Netbooks as something new that is both apart from and incremental to the notebooks that use higher-end (and higher dollar) Intel parts. At the same time, it's in AMD's interest to denigrate Netbooks as underpowered and not real PCs.
Finally, there is a continuing trickle of evidence, such as this NPD Group report, suggesting that consumer satisfaction with Netbooks isn't all that great.
Like James Robertson, this latest report struck me as a bit curious. Many of the people I know with Netbooks are almost excessively fond of them. However, it's fair comment that most of the people I know as also geeks, are attracted to the new and different, and understand what a Netbook class of device can do--and what it can't. It doesn't stretch credulity to imagine less educated consumers taking a $300 notebook home and then being dissatisfied because it's not a general replacement for a $1,000 notebook.
Highly portable notebooks without the road warrior premiums historically associated with portability are a great advance for consumers. But I'm also excited about the devices that new screen technologies and widespread wireless connectivity could enable. The possibilities in this space are great. Netbooks are just a flavor of notebook.
I've been following the goings on at the low end of the notebook market with considerable interest over the past year. Part of my reason is professional; the way that the most mobile client devices evolve says a lot about how we will access applications and what the infrastructure running those applications will look like.
I'm also interested on a personal level. On the one hand I travel quite a bit. On the other, when I'm not traveling, I generally work out of my home office where I have a hefty desktop rig with three monitors. As a result, I value portability far more than power in my notebook given that I mostly use it for relatively lightweight Web browsing and writing while I'm on the road.
Netbooks (to use Intel's term for ultraportable PCs) have become something of a phenomenon. This hasn't been so much because they've broken new ground in notebook features. In fact, the systems that generally get lumped in that bucket today tend to skirt the edge of the full PC experience. They're explicitly intended to access Web-based applications through a browser or to run some basic productivity software locally; they're not general purpose. And they use less power-hungry, but less powerful, processors such as Intel's Atom. They're inexpensive--under $500 in most cases--especially compared to traditional road warrior notebooks that have tended to be priced at a premium relative to the notebook mainstream.
So this trend toward smaller and cheaper is interesting for a lot of reasons. What it isn't, I've argued, is a clearly distinct class of system but rather, as I argued in November:
...a temporary phenomenon that will soften over time. Memory gets denser, processors get faster, LCDs get cheaper. Some of these Moore's Law-fueled advances could indeed continue to push the entry level of the notebook market down in price... But I strongly suspect that a lot of that technical advance will also go into beefing up the capabilities of notebooks in the sort of price band that a lot of consumer electronics sell for--say, sub-$500.
We're now seeing exactly that happen.
At the Consumer Electronics Show (CES), AMD announced its Athlon Neo ("Yukon") platform, which will first appear in the HP Pavilion Dv2. Dan Ackerman on CNET describes it as:
Pitched as a kind of step-up from Netbooks, Neo provides for a little more processing muscle--at least enough to power Windows Vista. The CPU is called the Neo MV-40, runs at 1.6GHz, and comes paired with ATI Mobility Radeon HD3410 graphics.
Besides that, the Dv2 also has a fairly large keyboard for a 12-inch laptop, starts at about 3.8 pounds, and is 1.3-inches thick at its thickest point. The display is a 1,280x800 LED.
Pricing will start at $699, which puts its entry level at or a bit above the high-end of Netbooks such as the Asus Eee PC. But, at the same time, this is perhaps half the price of the more fully-featured ultraportables pitched primarily toward mobile professionals. AMD's and HP's intent here is to drive the price down on portability while still providing enough screen real estate and processing horsepower to handle things like multimedia and browser with lots of tabs open smoothly. "Good enough for the real world" is how AMD Chief Marketing Officer Nigel Dessau put it to me (with the implication that lower-end Netbooks are not.)
Intel also plans to enter this segment of the notebook market with its consumer ultra-low voltage (CULV) platform later this year.
None of this should be taken to suggest that we won't continue to also see a class of smaller, cheaper notebooks that will continue to prioritize price and mobility over a larger screen and keyboard and better performance. But it's becoming clear that such systems aren't an isolated phenomenon, but rather part of a more generalized broadening of the notebook space that includes Netbooks, 17-inch gaming machines, and everything else in between.
Earlier this year, I expressed my skepticism that Mobile Internet Devices (MIDs) and Netbooks (essentially scaled-down, low-cost notebooks) would come to pass as mainstream product categories. My reasoning boiled down to an assertion that these things were neither fish nor fowl. As usually envisioned, a MID is a form factor that is neither as portable as a smartphone nor as full-functioned as a notebook. A Netbook is a notebook that is underpowered and otherwise compromised.
I've seen nothing over the past few months to change my mind about MIDs. If anything, Apple's continued march with the iPhone and the work going on around Google Android have me more convinced than ever that the browser-equipped smartphone is the future of truly mobile computing. (There are a lot of interesting dynamics here related to carrier hardware subsidies and the desire of carriers to lock down and restrict use in various ways, but those are topics for another day.)
Netbook sales, on the other hand, have been strong. In fact, they're driving a lot of the worldwide growth in PC sales. So, are we, in fact, seeing the emergence of a new product category--something that doesn't happen very often?
We are seeing a lot of consumer interest in very portable computers that are economy-priced. Economy pricing is really what's new here. Historically, companies have paid big premiums to get the most portable notebooks for their road warriors with the goal being to give up as little function as possible in service of light weight (and, to a lesser degree, small size).
Some things about Netbooks do indeed look like a new category of product. The first is that a lot of the people purchasing these devices are individuals, not businesses. In many cases (especially in the U.S.), they're intended to supplement--rather than replace--another desktop PC or a higher-end notebook. A second thing is that, especially at the entry level, Netbooks tend to have differences of kind, and not just degree. They run Linux and Windows XP, not Vista. They're explicitly intended to access Web-based applications through a browser or to run some basic productivity software locally; they're not general purpose. And they use less power-hungry, but less powerful, processors such as Intel's Atom.
However, I wonder if the apparent bright line distinction from other notebooks isn't a temporary phenomenon that will soften over time. Memory gets denser, processors get faster, LCDs get cheaper. Some of these Moore's Law-fueled advances could indeed continue to push the entry level of the notebook market down in price. Perhaps we'll even have a $100 laptop that only costs $100 some day. But I strongly suspect that a lot of that technical advance will also go into beefing up the capabilities of notebooks in the sort of price band that a lot of consumer electronics sell for--say, sub-$500.
Ultimately, I'm less convinced that we're seeing the emergence of a truly distinct product category than that we're seeing the continued downward movement of not only notebook entry pricing, but entry bulk as well. Besides, however fond IT industry people are at chopping markets into named categories, as a fellow analyst said at a recent meeting: "the average consumer calls everything a laptop anyway."
Intel perhaps most of all, but a lot of technology vendors are pushing the idea of MIDs (Mobile Internet Devices) and Netbooks (essentially scale-down, low-cost notebooks). Intel's interest here is pretty straightforward: the more a mobile device resembles a traditional PC, the more Intel's x86 franchise gives it a leg-up. By contrast, smartphones are based on any number of low-power processors, typically something other than x86 architecture.
I'm skeptical that these categories between the smartphone and the notebook will amount to a whole lot.
The issue I see with MIDs and Netbooks in the general case, however, is essentially a matter of form factor.
One the one hand, smartphones fit easily in most pockets. The downside is a small screen and text input that is largely by thumb, rather than by finger. Furthermore, because smartphones have historically been built using such a hodgepodge of hardware and software--including browsers--Website compatibility has been spotty at best, even leaving aside the (significant) issues that a smaller screen area introduces.
At the other end of the scale are familiar notebooks. Even the more portable varieties have more-or-less full-size keyboards and screen. Besides relatively high cost and the need to maintain and update a full-fledged operating system on a PC, notebooks weigh a few pounds and pit in a backpack or briefcase form factor--not a pocket, however oversized.
Against this backdrop, one can imagine Netbooks that sit in a kitchen to look up recipes or a MID that functions as a mobile browser and entertainment gadget somewhat in the vein of an iPod Touch. However, these scenarios feel like stretching to me. The cellphone is ubiquitous and highly portable (and smartphone browsers will get better). The notebook is well-suited to keyboard input and rich Website display (and will inevitably get ever smaller and lighter).
What do the alternatives offer?
A MID is a form factor that is neither as portable as a smartphone nor as full-functioned as a notebook. A Netbook is a notebook that is underpowered and otherwise compromised. At a low enough price point, perhaps. But the One Laptop Per Child experience suggests that the most aggressive price points may well be too aggressive to be practical.
In short, at least in a market where almost everyone has a cellphone and notebooks are the full-function PC of choice, it's hard to see the compromises of the MID and the Netbook as anything but too much pain for too little gain.
All that said, I'm now going to do something that used to intensely annoy a former editor of mine who never let the facts interfere with a good argument. I'm going to qualify my skepticism. By analogy, people ride and pedal all manner of vehicles. Some, such as bicycles and cars, are clearly mainstream. A few are true oddballs (unicycles). Some have very specific use cases (two-seater cars). Others are generally uncommon in the US but are relatively common in other locations (scooters).
Perhaps MIDs or Netbooks will emerge as the two-seaters or even the scooters of the computer world. Truly mainstream device? Probably not. But the uber-portable and inexpensive notebook, in particular, could find takers in the developing world or as a third- or fourth household PC in more developed nations. Especially as Moore's Law and other technical advances bring faster processors and bigger storage to even the most entry of price points.
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