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The iPhone will drive the netbook craze

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Www_goTouring around the tech web these days makes it readily apparent how big the netbook craze is becoming.  Netbooks are notebooks that are slightly smaller than normal and are typically cheaper than $500, although to hear people talk it seems that $400 is the sweet spot for netbook pricing.  Most of them are sold with minimal hardware components and some flavor of Linux for the OS.  There are models with beefier components and Windows XP installed but those come at a price that some are not willing to pay.  So what is driving the netbook craze and why do analysts feels that they will break into the mainstream consumer market where other gadgets have failed?  I think to answer that question we have to look no farther than the iPhone.

I talk to a lot of folks outside our little tech geek world, and the tech world is a very small world no matter what we think.  Mainstream consumers will be the huge group that fuels the netbook craze make no mistake and in my conversations with regular folks I have seen a big shift in the way they view netbooks.  Most folks use a computer at work because they have to and they view it as a necessary evil.  Getting it to work when they have problems and dealing with the IT folks leaves them with little desire to jump on a computer at home for fun.  I can’t tell you how many folks have told me that they just "don’t use a computer at home".

That began to change this last year when I noticed these conversations begin to change.  I started getting asked by a lot of these same folks to recommend a "laptop to use at home".  This began to happen more and more frequently and it intrigued me to say the least.  I could see a total change in their outlook in regards to having a computer at home.  They were no longer viewing a home computer as something they had to have to get by but rather something they could use to get on the Internet.  I heard this over and over so I started probing to find out what changed their point of view.  It turns out surprisingly, or maybe not so surprisingly, that the iPhone was at the root of the change in the way they viewed home computers.

It was clear these folks were no longer viewing home computers as something they had to have just in case they needed one but rather something they could have fun with.  They mention they can use one to "jump on the Internet", do email and get their photos off their camera.  When I ask them why their views changed many times I am told that they have not only seen from their iPhone how useful these tasks are but how easy they are too.  This changed the computer work from a hassle to one that is fun and easy.  They also see how the web is another source of entertainment for them when they are at home.  It’s a big shift for these folks in their way of thinking and the iPhone is behind that change.

Until netbooks started to hit the scene they would ask me to recommend a laptop for this home web work and two things kept getting in their way to get one.  Price and complexity.  The cost of notebook computers, even though they keep dropping, is high enough that the act of getting one becomes a big task for them.  They have to comparison shop and get advice from people like me so they get one that will do what they want yet won’t require too much maintenance.  When I started showing them netbooks their attitude changed immediately due to the relatively low price.  The netbook purchase then became more of an impulse buy like a TV they might see in a store and just pick up.  I can’t tell you how many people have said they’d just buy one if they could go into a big box store and pick one up.  They aren’t even concerned that these cheap netbooks run Linux rather than Windows, in fact that is a plus in their minds because they don’t want to do "regular" computer work.  They see these things as bigger iPhones, bigger screens and keyboards to facilitate surfing the web and doing email.  They are ready to walk into a store and buy one but they will want to see one on display first to make sure they can use it.  At $300 or so they will simply buy one and take it home to "do email".

I believe we will see massive netbook sales when these start appearing in stores.  The low price point will make them an impulse buy and they will fly off the shelves.  I also believe that if these started appearing prior to the iPhone that these same folks would not be as open to picking one up to get on the web.  The iPhone has changed the playing field for the netbook and the field can only get bigger as time goes on.

16 Responses to “The iPhone will drive the netbook craze”

  1. turn.self.off

    im with luscious. about the only thing we are seeing is that asus opened up the other brands eyes that a small computer could be sold to others then the road warrior suit with a IT department to take the cost.

  2. Luscious

    Five years ago, back in 2003, I remember getting a Fujitsu P1120 laptop for work. It was the smallest laptop you could buy at the time, with a 8.9″ touchscreen, Transmeta Crusoe 800MHz CPU, 256MB of soldered-on memory, 30GB 2.5″ HDD and ran Windows XP. It’s price was just over $1000, weighed about 2 lbs, was dead silent (no fan) and ran cool.

    Back then, mobile web access without wifi was limited to the first pocket pc phones, palm treos, b/w screen blackberries and pcmcia cdma modem cards for laptops.

    I traveled frequently with the Fujitsu, and whenever people saw it they couldn’t believe how small it was, actually thinking that it was just some toy because of it’s size, tiny keys and plastic looks. But when I turned it on and XP came on with the cdma modem card sticking out the side and showed them I could surf, email, chat, etc.. that I did on my desktop back in the office, while tapping the screen to open files and scroll, their jaws dropped.

    This was five years ago.

    And when I showed them I could pull it out from a slim attache or travel with it hidden under my coat, they simply didn’t want to believe that such a device could even exist.

    It’s amazing how today people who first see the 7″ EEE or the HP mininote get exactly the same reaction, yet neither of these two devices are groundbreaking.

    In that regard, the iPhone is nothing new either, since PPC devices from 2003 have had the same basic capabilities, minus the ostentatious GUI. People were amazed in 2004 when I showed them I could watch a full-screen full-length movie on my h6315 iPAQ, have a live MSN chat session with a friend half-way across the world, listen to music, phone, surf the web and take pictures all with one small device. They thought their iPods were cool.

    I don’t hate Apple, but I just have never felt the need to have an iPhone or an iPod simply because I saw that other devices already out there (for me) did a better job. And I feel mostly the same way about the current netbook craze – I already know how great they are from having used one 5 years ago.

    In fact, if you were to compare the Fujitsu P1120 with the HP mininote side-by-side, the resemblance would be remarkable. In 5 years, an eternity in the PC world, the design of the HP practically mimics the age old Fujitsu, except that the price has gone from $1000 to below $500.

    What has changed in that time is that the flooding of consumer channels with newer and better mobile web enabled devices (smart phones, PPC phones), cheaper laptop prices, and wider wireless data coverage (EVDO/EDGE) has given people the opportunity to “log on” without having to be tied to a physical location or connection. Laptop sales and prices now match those of desktops, people’s cell phones are getting web-aware, high-speed networks have evolved and people are now getting online in more places and in more ways.

    The iPhone has arguably gotten a lot of people on board the mobile web that were apprehensive when it came to using PPC/palm devices without the idiot-proof GUI. But I wouldn’t call it a catalyst for the next netbook craze, especially when the P1120 already existed 5 years ago and PPC devices performed as well as the iPhone (sometimes better) years before.

    As a final example, a friend of mine recently “just had to” run out and grab a new iPhone 3G because she found an application in the app store that allowed her to manage her Netflix account on the iPhone. I thought to myself “Big Deal”, pulled out my 4-year old PPC, pushed the browser key, pulled up the website, she logged on and realized she was at the same exact screen she would see from her desktop. She was out $300 and $70/month for 2 years, I had a grin on my face.

    Evolution, I ask? You be the judge!

  3. L. M. Lloyd

    I think you are poorly extrapolating a small sample. There are, last I heard, fewer than ten million people in the entire world with iPhones. Meanwhile my wife, who is a producer for a very large entertainment site, has far more than that (around 30 million unique visitors) view her site every month.

    I fail to see how tens of millions of people every month would be viewing purely entertainment sites, but only upon fewer than ten million people buying an iPhone did anyone realize the Internet could be fun.

    I understand where you are coming from, but I really think the desire to see the iPhone as some “watershed moment” as Apple hyped it to be, has perhaps clouded your judgment. Given the steadily increasing sales over the past few years of personal notebooks, BlackBerries, Windows Mobile devices, sub-notebooks and the iPhone, I think that it is much more a matter of all those devices riding the same wave, not a matter of the iPhone somehow retroactively creating a wave that then drove increased sales of devices before it even came out.

    I suspect that what you are seeing is just the maturation and acceptance of mobile computing by the masses in general. The iPhone, and several other devices have benefited from this, however probably due to the 5 iPhone commercials on every station every hour, the iPhone has become a very recognizable symbol of generally rising level of acceptance, at least in America. I certainly know that in both London and Tokyo, I saw plenty of people with all sorts of sub-notebooks and portable computing devices, but not an iPhone anywhere in sight.

  4. I am not saying that the iPhone is the only driver behind the netbook craze, not at all. I am simply reporting what I have been told by quite a lot of people who, yes, have computers at home and yes, been on the internet before. But they make it clear to me that the iPhone showed them how good it can be to play around on the web from anywhere in their house or back yard. Seriously, once they saw that they tell me that a super cheap small laptop would be just the ticket to extend that web time.

  5. So to summarise, nobody surfed the web for fun until the iPhone was invented. Now that the iPhone is here, people have realised that they can use computers outside the workplace and there’s now a mad rush to pick something up so they can access the internet at home – on something other than their iPhone.

    Maybe it’s just me but I thought the internet was doing pretty well in the home prior to the iPhone. I also thought that home computer sales had been pretty good for about, oh I don’t know, the last 15 or 20 years at least.

    If you ask me, the few Americans (that’s not meant as a racist thing but the iPhones selling better in America than anywhere else and even then it only represents a small part of the mobile phone market) that happen to own iPhones aren’t driving any netbook craze and this is the worst thought out theory I’ve heard in a long time. No offence James but this is just silly.

    People may well want to buy cheap netbooks but I think we are yet to see how this is going to work out. I also think that the strongest sales will come from parents who want to buy them as toys for their kids. At the end of the day people will continue to buy Windows based PCs or laptops for the home because there’s more to a computer than just internet access. I also think that you underestimate how much having a non-Windows based computer will turn a lot of people off. One of the reasons that Windows is so successful is that people use it at work and then want something familiar at home. I doubt too many people will want to put up with the hassle that Kevin’s been blogging about with his Linux-based Aspire One.

    If netbooks do start to take off I doubt it will have anything to do with the iPhone and everything to do with the internet. People know how the internet works and don’t need an iPhone to show them that it’s “fun”. When they see themselves spending a lot of their computing time on the web they may consider a netbook. If Kevin’s cloud computing thing takes off then netbooks may make even more sense. But I think you’ve taken this way too far by trying to tie it all in to some iPhone craze.

  6. Corrupted Mind

    Netbooks will go mainstream, but not because of the iphone (that’s just silly). The reason quite simply is “the kids”. School age children are trojan horsing them into a vast swarth of homes in the UK. Basically, parents now have an opportunity to get a full laptop for their children for the same price as a nintendo DS, PSP and for less than a PS3 or Xbox. It’s a no brainer, anecdotally a friend of mine who is a school teacher claimed that around 60% of her class of primary school kids were turning up with a netbook of some kind. It is the perfect parental solution, to keep the kids away from the main desktop or mac and clear from the work laptop.

  7. violajack

    I also mentioned this in the comments about the Aspire One, but the first reaction I got when I booted it at work was that “it’s just a big iPod Touch.” One of the comments my original EEE 701 got was “it’s just like my treo.” I have to agree 100% that these little netbooks with linux are more akin to smart phones with keyboards for internet and email and media viewing than to full laptops. Sure, you can have XP and all your windows apps, but then you need antivirus, a good firewall, anti-spyware, anti-malware, and stuff in addition to adding the apps that actually do what you want.

    I’m not sure any of the current icon based linuxes are all the way there yet though. The EEE Xandros was nice enough, but there were limits. I’ve been really impressed with the Linpus on the One, especially the slickness of merging an SD card with internal storage, the ease of adding email accounts to the email app they wrote, and the main interface in general. I mostly use these netbooks for just a few things, and this interface lets me have those few things right there all the time.

    I also agree with the comments about linux not having iTunes. It is a big limiting factor. Sure, they have media players that will play most any file you throw at it, but most people are already in the iTunes/iPod ecosystem. Linux has things like Synaptic and Add/Remove connected to repositories which provides functionality similar to an app store, but nothing for media. If Linpus had an icon for Add/Remove in the settings and a more iTunes like player that connected to some sort of online media store, that just might do it.

  8. The MSI wind and alot of netbooks have been known for their problems and quirks. But like you had mentioned, which notebook, netbook, or desktop doesnt. My 1000h has been rock solid compared to the ever so crashful iphone.

    I just dont like classifying the iphone as “reliable” and a netbook as “unreliable”. I see both having their problems and but the EEE PC 1000h being more reliable from day one then my iPhone.

    XP is going to see a re-birth in the netbooks along with Linux. Those that want more like itunes and google earth can get xp, others for just internet can get linux.

  9. Okay, so they have computers; they’re just not enjoying them. Can’t blame them for that. I don’t even own a desktop anymore. In my experience though, they won’t enjoy netbooks for very long either. People start off just wanting email and web browsing. Before long, they’re looking into Google Earth, CAD, iTunes, and all sorts of stuff. When they start asking you why they can’t sync their iPhones to their Linux-based netbooks, don’t say nobody warned you.

  10. pimlicosound

    The iPhone makes all the basic tasks very easy, within a closed environment, and on a superbly-made piece of hardware. Netbooks just don’t do that.

    I’m not saying that netbooks aren’t good. I have an iPhone and an MSI Wind myself, and I use the Wind every day for most of my computing tasks. However, I spent quite some time getting the latest drivers, battling the on-board mic, and such things. Judging from responses in other forums, others have similar usability problems with netbooks (just like with any other Windows of Linux-based PC).

    So here’s my point: if you’ve been inspired by the iPhone, a netbook is likely to disappoint. However, if you just want a smaller, lighter computer, and accept that it will come with all the openness, flexibility and, hence, complexity and unreliability of a regular PC, then you will probably be fairly satisfied.

  11. I have both the iPhone and the 1000h “Netbook”.

    “They are not particularly well made and the user interface and experience is limited by the OS – either XP or a Linux flavour, neither of which is as smooth or reliable as the iPhone.”

    The 1000h is very well put together, and XP is great. Not as pretty as Vista, OSX, or the iphone but gets the job done fast.

    The iphone crashes on me all the time, atleast firefox will save my tabs on XP. This netbook is becoming my main computer at school and at home on the couch. Plenty powerful for internet, email and One Note documents.

    Conclusion: People are realizing that current computers have too much power for what they need. The iPhone is a great portable and easy to use interface for the internet. Netbooks offer the right size, price, and usability that people want for similar internet use, with a physical keyboard.

  12. pimlicosound

    I think netbooks have quite a long way to go before they will explode as mass-market products. Current netbooks will only lead to disappointment if people buy them because they were inspired by the iPhone.

    They are not particularly well made and the user interface and experience is limited by the OS – either XP or a Linux flavour, neither of which is as smooth or reliable as the iPhone.

    If all people want to do is browse, check email, and watch YouTube, I’d recommend actually getting an iPhone. A netbook may be small and cheap, but it’s still an open system, with a fully-fledged OS, with all the complexities, bulk and reliability problems that come with it.

  13. Sumocat, that’s not what I’m saying at all. These folks mostly have older dekstop computers that they don’t like using much because it’s hard to keep them maintained and they “feel like work”. The netbooks they tell me would be perfect little computers to jump online while sitting on the patio or in front of the TV.

  14. Wait a second, if I’m reading everything correctly, it seems you are saying there are people buying iPhones who don’t have home computers. How is does that work? Without iTunes, the iPhone loses half its capabilities, or more since you need an iTunes account to download apps. Do they run iTunes at work? Furthermore, they can’t run iTunes on a netbook running Linux. That seems a poor combo to me.

    On the other hand, I can see how Joe Average would get reeled in by just the native Internet components of the iPhone. Yesterday, just being out and about, I used maps, camera, Box Office, and Evernote to tremendous effect. The latter two are apps, but my usage could have been replicated with web browser and email. Still would have needed iTunes (even if just for the account) for yesterday’s music though.

  15. The iPhone changed lots of things but not everything. I don’t think that the iPhone drives Netbooks. It’s the price and the fact that people finally realized that all they do on their PCs is Google, Email, YouTube and Browsing.

    No one needs 2 bazillions Mhz to do that stuff…