I get asked all the time why netbooks are suddenly so popular. My usual response is this: Once upon a time if you wanted a light weight, ultraportable laptop, you had to pay a premium price and you’d still wind up with a machine that wasn’t as powerful as a cheaper full sized laptop. Now, instead of paying $1500, you can pay $400 and get a machine that’s likely smaller and lighter than anything you would have found a few years ago. It might not be the most capable machine, but it’ll get the job done if you need to surf the web, edit some documents, or even perform some light weight multimedia duties.
Of course, there’s another factor: The economy. I think cheap and portable are always going to be great selling points, whether you’re talking about phones, computers, or handheld video game consoles. But when the economy is tanking, a lot of people that might otherwise be in the market for a $1000 computer might be looking for cheaper alternatives.
So the move toward netbooks is great for consumers. Nearly every major computer maker now offers some sort of low cost mini-laptop, which means there are plenty of choices out there. But while some netbook makers like Asus and Acer have been riding the wave of netbook popularity to increase their market share, other companies like HP and Lenovo would probably rather sell you a higher end machine with a better profit margin. It’s just that they can’t afford to stay out of the netbook market a a time when consumer demand for them is so high. The same goes for Microsoft. The company has started offering low cost Windows XP licenses to netbook makers as an incentive to get the computer manufacturers to include Windows instead of free software like Linux.
The upshot for software and hardware companies is that they have something to sell. The downside is that the profit margins are likely lower than they’re used to, which can affect their bottom lines… but it seems silly to complain that computer makers, chip makers, and software developers are taking a hit in the current economy, because you know what? Everybody is.
Anyway, long story short, if you’re tired of reading me opine about all of this, the folks at ChannelWeb have put together one of the best reports I’ve seen so far explaining the situtation. It’s choc full of facts, figures, and interviews with industry insiders. If you want to wrap your head around some of the reasons why the netbook market is growing at a time when computer sales are hurting, you should give the article a read.
Update: It’s been a good week for in-depth think pieces about netbooks and how they’re changing the industry. If you just can’t get enough of this topic, check out Clive Thompson’s excellent overview for Wired.