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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

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      1. Chuck

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

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

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    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!

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    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.

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      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.

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        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.

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      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!

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        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

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        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

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        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.

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      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. :)

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      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.

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

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      1. What do you have? netbook or notebook?

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    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!

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    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,

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    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.

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    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

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      1. WhatsYourPoint? Monday, October 12, 2009

        Not sure what you are trying to say here?

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        1. Thanks for that WYP. Seriously :-)

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      2. NativeofAmerica Tuesday, October 13, 2009

        Speak English.

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    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.

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    10. I agree with Om that as the “netbooks” keep growing in size they are really notebooks. It’s important to remember that the way smaller netbooks achieve long battery life is through “lite” hardware, especially the Atom processor. This just won’t drive bigger systems with displays as well as it drives the smaller ones.

      I’ve said from the beginning that the single factor that has driven high netbook sales is not the small size, although that has helped. It is the super low pricing and nothing else. The economy is hurting and netbooks stepped in cheap enough to still be an “impulse buy” for many. That’s why they are in retail stores, even those that don’t have a huge selection of notebooks.

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    11. “Sebastian was right when he said Windows 7 was ushering in an era of profitless prosperity.”

      You make that sound like a bad thing. As a consumer I cant see anything wrong with competition driving lower margins and cheaper prices in this space.

      Sure it sucks to be a producer watching your high margin cash cow turn into a commodity, but the ultimate outcome is good for the consumer and after some transitional pain not as bad for the re-invented producer as you might think. Eg international telephony – compared to the margins of 10 years ago, ‘profitless prosperity’ fits, but smaller margins with higher volumes means that they still make money and as a consumer I cant complain about the reduction in rates.

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      1. Allen

        I am not sure I made it sound like a bad thing. I guess you read it whichever way you want. My view is profitless prosperity is one man’s poison is another man’s meat.

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    12. Israel Nicolas Tuesday, October 13, 2009

      Netbooks a dying breed? I just saw an article three days ago that netbook sales grew 264% while Laptop sales shrunk 5%. Are you reading the sales figures? Actually the dying breed are premium notebooks from PC manufacturers that cannot differentiate each other.

      If anything netbooks have led the way for ultra-cheap laptops. I do not care what you call them as long as there is something out there that drives prices down in such a way that makes laptops a kind of commodity like cellphones. It’s all good.

      And even if netbooks keep getting bigger and border on notebooks, the best sellers will always be the 10 inch models. Everyone knows the flagship line of ASUS (1000H, 1000HE, 1005HA). This 12 inch Asus novel is a good niche, but the real sales will still be on the 10-inchers, so netbooks will lasts a lot lot lot longer.

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      1. I agree 100 percent, with everything you said.

        The mistake others here are making is they think the industry tells the users what to buy when it’s the other way around. The users tell the industry what to make. The 10 inch netbook hits the sweet spot for portability, battery life and cost. If they become too big you leave them home and the battery doesn’t last long enough. If they become too small you just use your cell phone. There is a real market segment between phones and laptops. And it probably cuts into laptops much more than it cuts into phones.

        Om — get an Asus and take it with you on your next trip. Leave the Mac home. It’ll open your eyes as to what’s possible. But you can’t get it by thinking your way there, you have to actually do it.

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        1. Dave

          You are assuming that I don’t have one of those devices. I am not arguing about the merit of netbooks to some – for me they didn’t work and I moved on. I still play around with some and carry them around when needed but it is not what I prefer.

          The point of the post (@ISrael and others) is that the netbook makers are creating more confusion in the buyers mind. What would happen? As I wrote in my lead:

          “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.”

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        2. A 10-year-old we know got a 10″ netbook for Christmas last year, and she already thinks the screen is too small and wants a bigger one. Granted, she is not on an airplane once a week.

          Everyone would rather do work on a bigger screen, if they can afford it, find room for it, and/or deal with carrying it around. The reasons to want a small screen are cost, weight, battery life. Productivity goes down on a smaller screen no matter what you’re doing.

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        3. I’ve been using a 13″ Macbook for over a year now for both personal and work use. While I’m not afraid to admit that I’m stuck on Apple products, I’m very curious about using a netbook.

          In my day to day work (a Sysadmin for a Windows/Cisco-Based Gov entity) I’m constantly called on to run from location to location and have something that works natively in the environment so I can replicate user problems/etc. The Macbook really doesn’t do this for me very well. I’m afraid of breaking it and compared to a netbook it’s rather heavy. Most of my apps are cloud/network-based so the Macbook seems overkill for work most days.

          What advice would you give someone like me who is looking to try a netbook?

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        4. Wow. I’m not sure what to think.

          I have a 10.1″ HP Mini 1000 that meets my requirements exactly, but Scarhawk knows a ten year old girl who proves me wrong.

          Dave Winer is exactly right.

          DGF

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    13. Do you really think all the above said points work?

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    14. ROFLOL

      Valley pundits: “why don’t the public use netbooks *properly*? They’re not meant to be general-purpose computing devices, they’re meant to be cloud access points. Didn’t they get the memo? T3h Cloud is the Way of the Future. Give Google all your data, ‘cos Google aren’t evil”

      Punters: “I can haz t3h cheap laptops. W00t!”

      Bloody public, always doing the wrong thing. How’s a member of the punditocracy meant to make a living?

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      1. Cruel — but 100 percent correct. :-)

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      2. Jon

        I seriously don’t get the point> I mean I know you are trying to be funny, but how about being more explicit and clear in getting your argument across.

        THanks

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        1. I can’t speak for “Jon”, but to me the distinction between “notebook” and “netbook” is pretty clear.

          Think of portable computer design as a triangle, with a customer demand at each corner: Price, Power, Portability. (“Power” here meaning “computing power” — fast CPU, lotsa memory, big HDD, etc.)

          These demands conflict with each other enough that you can have two of them, but not all three. Adding capacity in one corner tugs the design away from the other two.

          Before the netbook came, consumers had two choices:

          * Optimized for Portability and Power — think Sony Vaio, super slick, super fast, super expensive
          * Optimized for Power and Price — think generic HP $800 laptop, cheap but using desktop parts that make it bulky and hot

          The netbook filled a gap by optimizing for Price and Portability — the previously unserved corner of the triangle. To get there, it sacrificed Power, but the key insight the netbook designers had was that for a large segment of the market, who do Web browsing, email and light office tasks, even the most low-end machine imaginable with today’s hardware had sufficient Power. And nobody was making systems for those people.

          Of course, now that the market has been established it’s filling out with machines that trade some Portability or some Price for some extra Power. But the key difference between netbooks and notebooks is that for netbooks, Power will always be the least important consideration.

          (More thoughts on this subject here, to avoid lengthening an already herniated comment: http://www.jasonlefkowitz.net/blog1archive/2008/07/history_repeati.html )

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    15. [...] | Tuesday, October 13, 2009 | 6:00 PM PT | 0 comments | 0 tweets retweet » Om’s Notebooks vs. Netbooks: Can You Tell the Difference? post sparked a healthy amount of debate when it went up Monday. Given how closely I’ve [...]

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    16. [...] Lose Sidekick Customer DataMicrosoft Mobile's Worst Week EverHow to Burn $500 Million in a WeekendNotebooks vs. Netbooks: Can You Tell the Difference?3 Reasons Why I Love Larry the Oracle GA_googleFillSlot("gigaom_ros_btf_sponsor_3"); [...]

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    17. OM, i dunno where to start und where to end with your article cause these “facts” you list are quite confusing and wrong in many ways….

      Let’s try to clean it up a little bit:

      First of all the dying breed statement…. hmmm the only device that is producing growth rates for the hardware market is a dying breed? that’s a quite interesting point ;)
      Well, of course you are talking about these bigger “netbooks”, that are sporting MID hardware like the Atom Silverthorne (cause this was the only way to get around Intels Diamondville core restriction) and the upcoming N270 platforms with Nvidia Ion chipset.
      By the way, Lenovo and Samsung are not getting the subsidized version of the N270/N280 any longer, HP is the next OEM on the list! But these systems are such a small niche, just take a look at the Amazon topseller lists and you will know which netbooks are selling.

      Innovation and creativity is happening in this market like nowhere else! How creative were desktops and Notebooks in the last 5 years. More Ghz, more cores, better graphics… Rock’n Roll, that’s very innovative. SSDs and 3G for the massmarket, Intel Atom, VIA Nano, NVIDIA Ion, NVIDIA Tegra, GPS, Motion Sensors and Multitouch Screens. This happened on the netbook market in just 18 month and you are telling your readers this market is not creative…. oh well :\

      The 1GB restriction with Windows 7 or this Windows 7 Starter Edition hoax was never true. Who made this up, it’s pure BS!

      The 1201 is not a netbook but a subnotebook. Compare the CULV 1.2Ghz singlecore with an N280 and you won’t see a big difference in its’ performance. So is a netbook a netbook only because of the cpu? Of course not! Netbooks have a display of 10.2inch max! It’s that simple.

      The Booklet 3G is a new device? There is nothing new about it, it’s an overprized netbook with MID hardware, nothing innovative.

      And i just hope, that the OEMs are not following Apple cause netbooks are for the massmarkets and not for a minority and niche. Copying Apple means doing a tablet, which always failed in the last decade. Good luck with that. ;)

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      1. Just to clarify. A netbook is not defined by it’s size. If the public calls it a netbook, then it’s a netbook. Make sense? You or nobody else can define what is or what isn’t a netbook. If anything, a netbook is defined by weight, not by size. If it’s heavy, it’s not a netbook. If a 12.6″ computer is light and portable, then it’s a netbook. A netbook is a portable computer. Heavy computers were considered portable, that is, up until the point that netbooks arrived on the scene.

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    18. [...] timing on this is actually perfect. On Monday, Om wrote a valid post on the blurring lines between netbooks and notebooks. In a rare moment of respectful disagreement, I wrote a bit of an opposing viewpoint yesterday. In [...]

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    19. The big thing with netbooks is long battery life. That means small, bu mostly it means ARM cpu. Intel’s Atom cpu still draws too much power. So the “real” netbooks have not even arrived yet. The author’s argument is premature at best.

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    20. Those who suggest that netbooks are a dying bread or that netbooks are rubbish for work because of the small screen size don’t understand the idea of netbooks and why they’ll always be a market for them.

      For a start you are not suppose to work on netbooks. Netbooks are essentially a toy, a portable gadget meant to be thrown in a bag when you go out shopping and taken out again when you stop for a coffee so as to catch up with your email, read the latest post on the blogs you are following, or do a bit of surfing. Notice the “Net” IN NETbook?

      Also as for memory size, linux runs beautifully on this small devices. Just because Microsoft cannot/will not produce an OS that fits such small hardware requirements is no need to think that the netbook market will die out. Conversely, you could argue that Microsoft has missed a trick with not producing a netbook specific OS. Google’s new browser centric OS seems to be a perfect fit for the growing netbook market as essentially that’s all you need, everything else is, as they say, “in the clouds.”

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    21. [...] Settle for a Tiny Display. As Om has pointed out, netbook specifications continue to encroach on standard laptop specs, to the point that the real [...]

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