46 Comments

Summary:

Netbooks, as they were originally envisioned, may already be a dying breed. It’s all thanks to the PC industry, which, instead of innovating on what seemed like a promising form factor, has turned it into the all-too familiar notebook, except cheaper. The problem with PC makers […]

Netbooks, as they were originally envisioned, may already be a dying breed. It’s all thanks to the PC industry, which, instead of innovating on what seemed like a promising form factor, has turned it into the all-too familiar notebook, except cheaper. The problem with PC makers is that they’re not terribly creative; they typically don’t invest a lot of money on innovation. And why should they? After all, they’re no different than makers of household detergents, earning pennies on the dollars. So they do one of three things:

  • 1. Try to copy Apple (which is a good thing).
  • 2. Try to copy each other (which is not a good thing).
  • 3. Take design cues from either Intel or Microsoft (which is a certifiably bad idea).
  • So when Asus came up with a tiny netbook called EeePC, all the other PC makers followed suit. But since they couldn’t really distinguish themselves by either design, price or software, they — notably Samsung and Hewlett Packard — did the next best thing: started competing with each other on “features,” among them bigger screens, bigger keyboards, bigger hard drives and better graphics. In other words, they moved away from the very reasons the EeePC became a hit in the first place.

    A few months ago, after talking to Nvidia CEO Jen-Hsun Huang, I wrote a post in which I argued that netbooks were nothing but cheap laptops that would eventually pull the PC industry into a self-imposed death spiral. Many disagreed with my argument, pointing out key differences between the two devices such as memory upgrade capability and screen size.

    There are, however, some new developments that make my thesis about the non-existent differences between netbooks and notebooks even stronger:

    • Samsung is offering a memory upgrade (2GB) to its N310 netbook that costs $479. Microsoft doesn’t allow companies to sell netbooks with the Windows XP home edition with more than 1 GB memory, so this is Samsung’s way of getting around that restriction.
    • ASUS is readying a 12-inch version of the EeePC. It has the innards of a netbook but with more memory, better display and Windows 7. I can’t tell if this is a netbook or a notebook. Go figure.
    • Nokia is releasing its Nokia Booklet 3G, yet another product that’s going to cause further market confusion. (Gizmodo review)

    Sebastian was right when he said Windows 7 was ushering in an era of profitless prosperity. We are seeing the end of the netbook as we (briefly) knew it.

    Photo courtesy of Liliputting.

    1. My understanding is that Microsoft has dropped the 1 GB restriction for Windows 7

      Share
      1. Chuck

        If they did this, they did it quietly which means that the netbook/notebook confusion is intentional.

        Share
        1. They never advertized that they were the one who established the 1GB max limit (to install Windows XP) in the first place.

          Share
    2. I could never really wrap my head around the actual distinction between the semantics of a Netbook vs a cheap Notebook. It seems as thought competition for features in the Netbook market is aligning with price-competition on the notebook market to ultimately blur the lines to a point where the Netbook must become extinct as it is perceived as inferior from a marketing perspective.

      I propose that no “laptop” costing more than $199 shall be called a Netbook. I know its arbitrary, but I don’t really care! I want something I can give to my 5 year old so he can go on NickJr and I won’t feel so bad if he spills his juice on it!

      Share
    3. Om, the two things that make netbooks attractive are:

      1. Battery life.

      2. Small form factor.

      It’s also important that they’re no more than 1/2 the price of notebooks. But the first two things are primary.

      I don’t know if I’d be interested in a 12 inch Asus. I already have a 13 inch MacBook Pro. But when I’m going into the city I throw the Asus in the knapsack, not the Mac.

      Share
      1. Dave

        Agreed. I think both your points of are extremely valid.

        1. Battery life is an issue and that is where net books shine and you are right about it about being the key differentiators.
        2. On the other issue of small form factor, I think they are moving away from it and that is a shame.
        3. The prices are pretty much getting closer – $450 netbooks vs $550-$650 for notebooks.

        Some one needs to remind these guys to stay focused and make netbooks smarter, not bigger.

        Share
        1. Let’s see if anyone buys the larger netbook. I don’t lust for larger size. Maybe faster and bigger hard drives. I actually am pretty happy with the one I have now. 10.5 hour theoretic battery life (8 hour actual) is more than I’ve ever needed. My MacBook runs out of power all the time. Sucks.

          Share
      2. Dave I agree with you. I am not into buying a “larger netbook” Macbook air was a pretty good one for me though the battery issue is still a pain in the butt. :-)

        Anyway I hoping a nice Win7 machine comes to market that is worth switching over to!

        Share
        1. Om – one of the key indicators of the degree to which these devices are competing or complementary is whether individuals purchase just one of these devices (suggesting they are competing) or multiple (suggesting they are complementary). In some segments (e.g., individuals < age 30), netbooks and laptops are clearly competing, while in others (professionals) they appear to be complementarity at present. Over time, I suspect you are right – distinctions will continue to blur, in part because of the herd mentality. I do believe, however, that there are opportunities to further and better differentiate not just on features, but apps, services (esp. connectivity), etc. Intel's recent announcement of an App store for MIDs is a step in the right direction.

          Phil Hendrix – immr

          Share
        2. Om, readers may be interested in research we did last fall w/ Thought Leaders on Mobile Internet Devices (co-sponsored by GigaOM, GSMA, and INmobile.org). Discusses some of the distinguishing features as well as blurring distinctions, keys to success, etc.

          Copy of the free report is available at http://www.immr.org/1/immr_mids_summary.pdf

          Phil Hendrix, immr

          Share
        3. People WILL buy the larger netbook. The peak will be at 12″. Why? Full size keyboard. That is why you don’t see 8″ netbooks anymore. The market has dictated bigger keyboards. So, the max netbook size will be the smallest possible screensize that will enable a full size keyboard.

          I will squash the price comparison between netbooks and notebooks. You don’t know the difference? Okay, go rent a notebook, say 13 or 14″, then go rent an 11 or 12″ netbook. Guess what? The difference between NETBOOK and NOTEBOOK is PORTABILITY. Got it? Light and small = netbook. Notebook = heavy (small is debateable, but go ahead and pack around your extra couple pounds). I’m sure we all thought the original iPod was pretty cool. Want to compare that to a Nano? Same applies to computers. Deal with it. Netbooks are no longer limited. It’s only the users bias that limits the experience or courage to try a netbook.

          Share
      3. I’m thinking about buying a netbook as a secondary computer, and in my mind Dave’s second point, the small form factor, is the primary determining factor in what I want to get. Other things such as battery life and price are nice to haves, but they’re not the number one primary factor.

        One thing that I would like, however, is more than 1 GB of memory. If I’m going to have this for a few years (I tend to keep computers for 5 years or so), I don’t want to be in a situation in 2014 in which my 1 GB netbook is completely useless. 2 GB would at least buy me a few more months. :)

        Share
      4. The only reason netbooks have a small form factor is that a smaller screen is cheaper, and takes less battery power to light up, thus making the battery smaller and cheaper also. Nobody actually wants a small screen, what they want is low price, light weight, and long battery life. If those can be achieved in something that looks more like a traditional notebook, then netbooks don’t need to exist.

        Let’s not forget that the whole netbook category came about as a response to the threat of the XO “$100 laptop.” It’s a mess because it’s an experiment in what costly notebook features you can get rid of and still have a saleable product. Do you really need x86 compatibility, thus ability to run Windows 7, or are you willing to run Linux on x86 to save a few bucks, or Linux on ARM to save even more? How small a screen and keyboard are you willing to work on? Do you really need a DVD drive? HD video playback? etc. Whatever you’re willing to sacrifice today, you’ll get back for free in a few years when Moore’s Law shrinks it into your price point.

        Within a few years, the netbook category in this debate will be replaced by everything that isn’t a proper Windows 7 PC or Mac. Can you get your work done on a smartphone connected to an HDTV, or a game console’s browser? If not today, how about 10 years from now when they’re 1000 times faster? At some point, not only are notebookcomputers “fast enough,” so is everything else, especially with assistance from the cloud.

        This is why Apple is running so hard to move up the stack. If hardware margins collapse, they can sell media, applications, cloud services, etc. If they can keep that value tied closely to hardware they might keep hardware and OS margins up for a while longer also. The rest of the consumer computing industry is rushing headlong towards commoditization on the order of $20 DVD players. At least they have the sense to copy Apple where they can.

        Share
    4. Well No not really! Sheesh Im just not all that Technical…. lol

      Share
      1. What do you have? netbook or notebook?

        Share
    5. But … have you ever used the original eeePC’s keyboard? Having a larger one is definitely /not/ a bug. It’s a selling point!

      Share
    6. @Om / @Dave,

      You both make the case for Qualcomm’s “smartbooks” – longer battery life and small form factor. Combine these desired features with Internet based computing and you’ve put boundaries on the smartbook market.

      I agree with both of your assertions about desired features, but disagree somewhat on why the PC manufacturers are “racing to the bottom”. I think the key reason is due to the fact that hardware margins have been falling for a very long time. The Internet as a computing platform is accelerating this decline, making hardware differentiation nearly impossible. The same thing is happening to hardware for smartphones, hence Apple shifting the differentiation and emphasizing applications and services which leverage the Internet.

      Put simply, hardware is nearly dead in all computing form factors, Internet based applications and services are where the margin opportunities lie.

      My $.02.

      Best,

      Share
    7. Since the PowerBook 2400 I have wanted a return to the small devices that could perhaps be linked to a larger monitor. Even the small keyboard didn’t deter me, but alas until the Air, I didn’t feel like there was a computer that fit my needs.

      My ultimate computer would be a tablet the size of an old Newton, obviously more efficient screen-wise, with the ability to drive the 24″ monitor. A Happy Hacking Keyboard and all is right in the world! This won’t arrive for a while, if ever, but one can dream. And, as a designer I need OS X.

      Mostly I feel that general purpose computing is not going to be about devices in the future. Cheaper computers do not make for a great market. Every now and again a cool paradigm rears its head. Toshiba Librettos weep in there lost opportunities! The future is mobile, cloud-based, and open.

      Share
    8. Sometimes I wonder how int he worldl, One person can write so many blogs with so much of things to do in life, If i see from the semantics of the blog I am have strong feeling that GIGAOM hires people to write blog and name is after OM Malik, thats a total shame or smart job

      Share
      1. WhatsYourPoint? Monday, October 12, 2009

        Not sure what you are trying to say here?

        Share
        1. Thanks for that WYP. Seriously :-)

          Share
      2. NativeofAmerica Tuesday, October 13, 2009

        Speak English.

        Share
    9. Like any piece of consumer electronics you always get more and more for your dollar over time so any category defined by price is doomed to ambiguity over time. Netbook finally took off because they could build a cheap device with enough processing power to be somewhat useful and because laptops had lost touch with original portability goals and instead became desktop replacements with 17″ screens, 320GB harddrives, etc.

      The question now is there really a market for a computing device with 8-10″ screen and more battery life. Do people just want to access the web and do basic documents or should it have a touch screen, should it be an e-reader, gaming device. Obviously rumors would suggest Apple has been struggling to figure that out for several years but appears they believe they can now pack enough processing power and battery life in a thin enough box at a reasonable price to do all those things and thus create a new device category.

      Share

    Comments have been disabled for this post