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.

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9 replies on “Why netbooks, why now?”

  1. Perhaps my age has finally caught up to the number of grey hairs, or perhaps I am finally tired of chasing the hardware game like NCPILGRIM. Many of my colleagues agrees that computing is no longer the BBS-dialing, network-gaming, or media-grabbing eras of the not-too-distant past, but rather an essential part of our daily work and our daily living. Just like in my younger years of pursuing a few more horsepowers on my car engine output, today my car is a basic mini-van that shuttles my family from point A to point B. My last “hot-clocked” computer retired 4 years ago and now I enjoy working on my Acer Aspire One mostly while opening my Thinkpad just for the more demand tasks such as CAD work. And when we have affordable options like our Blackberries to process e-mails, usable cloud computing services, and accessible netbooks, who needs a notebook or desktop to take care of daily business.

  2. Wow! OLPC (4th) ranks higher than Dell (5th) in netbooks according to Wired. I’m impressed! I thought that OLPC was pretty much finished in terms of actual deployment.

  3. Wow! OLPC (4th) ranks higher than Dell (5th) in netbooks according to Wired. I’m impressed! I thought that OLPC was pretty much finished in terms of actual deployment.

  4. A Netbook Conscientious Objector

    I’m not sure when I deserted from the desktop computing wars. It was not a deliberate decision. However, I know it was sometime during the period of the great Windows Vista debacle.

    For economists and historians, Microsoft’s Vista was simply the natural result of the arrogance and hubris of a near monopoly — and a huge waste of effort for some of the most talented computer professionals in the world. For me, it was the end of an era.

    When it comes to desktop computing, I’m a lifer.

    My first job was with IBM and its room size computers. Some years later, I bought my first desktop computer — a 16K Radio Shack Model I. (The only way it had to store your data was on cassette tapes.) I never got the thing to do much of anything useful, but I was hooked. From that point on, I have “updated” and “replaced” each time Microsoft and its computer hardware acolytes produced the next upgrade.

    But as I read the various stories of the “benefits” and problems associated with Vista, I gradually become more repelled by this new version of a tool that was essential to my work day — and my personal life. The poor performance, the escalating hardware demands, the wasted hours that had to be invested to simply extract an acceptable performance from this workaday tool, were a time and money investment I did not want to make.

    And as hardware and software have improved, desktop computer capabilities have begun to exceed my computing requirements. While there are certain computer tasks that will always require every bit of computing power that can be afforded, the documents, spreadsheets, presentations, and communications, required by most people are easily met by any modern computer.

    Recently, when it became obvious I was going to have to replace my aging laptop, I also began to question if I really needed both my laptop and my desktop. The usual result from this type of analysis is the selection of one of the 17″ desktop-replacement “laptops.” But once you start examining old habits and biases, who knows where it will lead.

    In my case it lead to the Samsung NC10. A netbook did not require the desktop space and myriad wires, cables, and drives of my desktop. Neither did it require the lifting, moving, and carrying, of the eight pounds of dead weight of my old laptop.

    It’s true, I am still using the antique (in computer years) Windows XP operating system. But I can’t think of any need that I have that this operating system does not fill.

    The natural next step was to move to Open Office and other open source programs. For my web browsing, documents, spreadsheets, and other general uses, the open source programs serve me very well.

    I have some software needs for which I either can’t or choose not to abandon the better known commercial versions: Adobe Acrobat, Photoshop Elements, MS Publisher, and half a dozen other specialized programs. All of these easily run on Sammy.

    My current computing hardware consists of the following:

    A blur Samsung NC-10 (on which I only use about 20 GB for programs and current files)
    An external 300 GB hard drive for photos, music, backup and archiving files
    A portable 60 GB hard drive with backups of my most critical files — which I store away from my office.
    An external CDDVD drive — which I only use about once every six weeks
    A 9 oz Sony eReader — for ebooks, but also for personal and business documents that I want to read or study, that I transfer from Sammy (in PDF or RTF format)

    The use of the external hard drive for the majority of my file storage is also a significant change for me. Why “work around” thousands of files on a desktop, or “carry around” the files on a laptop? “Check out” the files you need, keep the rest in an external hard drive “library.”

    The external hard drive not only is separated from the wear and tear of the daily usage of a laptop, it is protected from any catastrophic failure that might occur on the laptop. And if you have moved all your computing to a laptop, do you really want to fly around the country with all your important computer files — subject to accident, theft, and airport security?

    As an additional benefit from this downsized computer setup — it’s a lot cheaper than my past solutions.

    While most of the words above are about my hardware and software changes, I think that my most important change is one of attitude. I have lost my faith that the next new hardware or software “upgrade” will really improve my computing and my work life. And I think an increasing number of computer users are making this same decision — to the detriment of computer and software suppliers.

    I know that computers will continue to be a useful part of my life. I even think Microsoft has become concerned enough to fix most of Vista’s problems with Windows 7. But I will never again confuse the value of my computer system with the value of the work it produces.

    I’ve resigned my commission.

  5. Another factor may be folks buying their second computer. Most people I know that have bought a netbook have a desktop or larger laptop – they want a companion or smaller device for the café.

  6. We sometimes forget the best-selling computer of all time was the Commodore 64, which was $200 at K-Mart (close to $400 in today’s money). The real question should be: Why did cheap computers like the C64 vanish for such a long time?

    I blame the used market. At the rate PCs were replaced and thrown away, anybody who wanted a less powerful computer at a cheaper price could always find one a couple of years old for peanuts — or less than peanuts, sometimes they could be fished out of dumpsters.

    So, why are people now buying new netbooks instead of fishing old computers out of dumpsters? The form factor is a big part of it, because ultra-portable devices are the rage now, and there is (almost) no previous generation of ultra-portables.

    There is something else going on, though. I think the treadmill of trying to justify more and more powerful systems is running out of steam. Moore’s Law has finally taken us well beyond the point where many ordinary people can benefit much from a more powerful system, for the kinds of tasks they typically use a computer for. Thus the whole replacement cycle of computers is starting to sputter and stall out.

    This phenomenon was bound to mean trouble for the business models of PC makers (and Microsoft), with or without the rise of Netbooks.

  7. A long but interesting read. We even got mentioned in a quote:

    quote=”Bill Paschick, president of Rain Recording”
    “Look, there’s always the lunatic fringe and the mainstream,
    the people who chase zero. In better times, you could make
    a good living selling to the lunatic fringe. Not now.”

    Like the punch line to the old joke of the flat tire, the salesman
    and the insane asylum patent:
    “I may be crazy, but I’m not stupid.”

  8. BTW: Another good task for netbooks is to function as a remote desktop client. For example, when my Mini 9 arrives, I’m going to attempt to run Visual Studio 2008 on it, but if performance is horrible, I won’t mind very much because I still have the option (I’m around internet connections almost 24 hours a day) of just remoting into my workstation and leveraging the P4 in it for compilation, while the Atom just has to worry about keeping the screen updated & handling client-server communications.

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