Netbooks: too good for their own good?

 

Not the workspace of the future Intel envisioned.

White hat or black hat, which hat does the netbook phenomenon wear? 

 

Or, Are netbooks too good for their own good?

Netbooks are certainly the fastest growing segment of the computer business right now, with just about every major maker entering with at least one model (and the folks at Asus apparently trying to introduce one new EEE PC model for every netbook some other company puts out). Netbooks have made Asus a household name in less than 12 months, and catapulted Acer to the number one spot in computer sales world wide. Business annalists expect 35 million netbooks to be sold in 2009.

But not everyone is happy about the rise of the netbook. A recent article in Business Weekly sums up a growing dread among industry watchdogs and the more conservative executives at the big players. Are netbooks going to kill the laptop, and bring down the whole computer industry? Can the industry, long used to charging premium prices for laptops, survive on inexpensive products aimed at the so-far computerless masses? And, in fact, how many netbooks are being bought by people who might otherwise have spent more on a full sized laptop (or much more on a traditional 11-12 inch mini-laptop) thus taking money out of the pockets of every one from the traditional laptop makers (often the same folks making the netbook) to the long chain of  those who supply components for computers of all kinds? 

It might be important to remember that this whole netbook thing started, according to Intel, as a way of empowering, computerizing, and, mostly, interneting those who could not afford a trational computing solution. Netbooks were supposed to be an inexpensive way of connecting the disenfranchised to the world wide web…bringing the blessings of email, twitter, and facebook…Google and Yahoo and YouTube…web surfing and ecommerice to the huddled masses. They would run a few basic applications, to be used for homework (which is much the same, whether you are doing it for school or the office). But no one was suposed to be able to mistake them for a real computer…a computer made for real work (or real play for that matter).

And, of course, that was the mistake Intel and the first netbook makers made. Even the first Asus EEE PC was simply too good for its own good. Asus attempted to be true to the netbook mandate, to the extent that they designed a highly simplified user interface, in a Linux variant, that basically allowed the new user to do the tasks listed above, and little else. However, the underlying hardware was fully cabable of running a full blown Linux operating system and a very Windows/Mac-like desktop, and the vast majority of applicaitons written for Linux. That was Intel’s fault. The basic chipset supplied to would be netbook makers was simply too powerful.

Worse. Asus acutally installed the full blown operating system under the simplifed interface. It was all there. Just waiting to be turned on.

Early adoptors, the majority of them computer geeks in search of a new toy, quickly bypassed the simplified Linux interface and turned on the underlying operating system. They then installed pretty much everything they could think of trying on the machine. And, again, being mostly Linux folk, they installed other variants of Linux and made them work…and of course, someone had to try Windows XP. XP, it turned out, could be shoehorned into the limited memory of the original EEE PC and actually ran quite well.  And that was, as they say, the beginning of a whole different story.

Users demanded a full-on XP version, and Asus, knowing that if they did not, someone else would, obliged. In fact, Microsoft obliged, making XP available at a deep discount for use on Netbooks (perhaps swayed by the original purpose of the netbook, and, maybe somewhat naively (or arrogantly) assuming, as Intel had in the first place, that no one was going to actually try to do serious work (or play) on a bare minimum XP machine. After all, they are the kind of super-geeks who think (or at least thought) that Vista is really cool, and the logical next step for connected computing. XP? Who would want that dinosaur?

And, of course, users wanted a higher resolution screen. 8.9-10 inch, 1024×600 screens very quickly became the norm.

While most netbooks are still offered with some kind of simplified interface, a high percentage of netbooks sold come with XP preinstalled…and a suite of basic Windows connectivity and productivity applications. 

And, with the introduction of the energy efficient, multi-threaded, 1.6 GHz Atom processor, netbooks became even more capable. An Atom powered XP netbook will run iTunes and play a downloaded movie (a real test). It will run Photoshop. It will run, of course, Internet Explorer, and Firefox 3.x and Chrome at speeds practically indistinguishable from traditional laptop performance. It will run Office or any of its imitators. Netbook users post lists of games they run successfully on their netbooks.

An Atom powered XP netbook with a decent size hard drive, a 8.9-10 inch screen, and a usable keyboard  (like, for instance, the $349 Acer Aspire One or the $449 Lenovo Ideapad S10) offers such good performance that it is a real alternative for a traditional laptop…and, for the highly mobile, who lusted after those unreasonably expensive mini-laptops without ever stretching the budge that far, the netbook is simply a gift from heaven. Affordable. Capable. Portable. A gift outright!

And too good or its own good?

Certainly, as Business Week notes, netbooks are going to put price pressure on the whole laptop category. Already I see an Acer with 14 inch screen, a gig of ram, a 120 gig hard drive, and an optical drive going for $499 at WalMart stores, and I expect, as Christmas comes upon us and vendors and retailers panic in our lean economy (can you say “the year with no Christmas”), to see a lot more budget offerings from many of the major players. $499 is well within the netbook range, and, aside from portability, a $499 14 inch laptop offers, arguably, a lot more computer for the same money.

Which, of course, will put pressure on netbook prices, maybe even driving the price of a basic simple interface Linux model down to the Intel’s original $100 to $200 price point.

At that point we will have changed the computer landscape forever, creating a new class of $200, half gig memory, simple linux driven, entry level devices for internet connectivity and homework (prices roughly equivalent to a cell phone…and many of these will be bundled with at least data service from a cell company), a $350-$450 class of highly mobile machines tricked out with a gig or more of memory,  XP or Windows 7, and full suite of connectivity and productivity applications (probably with dual core Atom processors or the equivalent), and a $400-$500 class of entry level traditional laptops (14 inch screens) with slightly more powerful processors and optical drives. Who knows, we may even see a $600 Mac iNetBook.

And I can’t see why this is not a good thing. I have feeling computer makers will be able to figure out how to make money off such a structure, and consumers will benefit (especially students and the highly mobile). With this kind of structure, we are no longer looking at the old dream of “one computer per household”, we are looking at Intel’s goal of one computer per person, and two computers per person for the highly mobile. 

The current crop of netbooks are not too good for their own good…they are simply filling a diffent nitch than originally intended, while the market and the makers sort themselves out to handle the new landscape of computers and connectivity. This is a good thing.

Further reading along these lines:

Intel rethinks the netbook

The Net impact of Netbooks: Wharton