Thoughts on Netbooks
posted by Paul Bergevin on March 03, 2008
A confession: I get jazzed when the tech industry shakes things up with innovation and new products. For geeks like me, these are interesting times indeed. Who’s not curious about the creative response of handset manufacturers to the challenge of the iPhone, for example? Bring it on!
I’m especially fascinated lately by the emergence of a new category of PCs we’re calling Netbooks. It started with a trickle and could soon turn into a flood. So what’s a Netbook?
They are small laptops that are designed for wireless communication and access to the Internet. And they cost about $250, making Netbooks a potentially disruptive and high volume market segment. Even though Netbooks won’t be confused with full-featured laptops, my hunch is that tons of people around the world will be attracted to a low-cost machine that plugs them in. The Netbook will expand the global PC market. By how much is a matter of conjecture.
In the past, when the PC industry breached certain price thresholds, it had a market-expansive effect. Remember the first sub-$1,000 PCs? They did not expand the market overnight, but grow the market they did. What will happen with Netbooks?
I’m encouraged by the success of the eeePC from Asustek, which sold 300,000 units in a very short time. The outlines of the Netbook category were apparent even earlier with calls for $100 laptops, which clearly had a galvanizing effect on the industry. From Intel Classmate PCs to the XO from the OLPC organization, we’re seeing major players in the global PC industry announce Netbook plans. Now that the combined might of the global PC ecosystem is getting behind low-cost laptops, there should be a strong impact in 2008 and a lasting one beyond that.
I see two distinct market opportunities for the Netbook. In the developing world, Netbooks will attract first-time buyers. They will exist alongside cell phones as a means for people to connect to the Internet and communicate. The low price and practical functionality will bring millions of new people into the global web – I believe this is driving a giant new wave of digital inclusion and enfranchisement. At least I hope so.
In more mature markets, I see a second major usage model for Netbooks. They will become supplemental PCs and ready access points into the cloud of Internet services, media and information. I imagine an extra PC for traveling, an extra PC for school work for the kids, a PC set up in the kitchen by the telephone to look up directions to the little league field or select items from a restaurant’s takeout menu. Is it crazy to imagine a profusion of these things in mature markets? Maybe not when the price of a Netbook is well below what it costs to take a family to a major sporting event. Maybe Netbooks can help more people of all ages dive into computing for their first time…even in the mature markets?
Will the PC industry really deliver on Netbooks?
How can a PC manufacturer possibly make money when the product sells for $250?
It will really help that Intel is buttressing the Netbook with new, purpose-built silicon. Our engineers designed the new Intel Atom processor family from the ground up to address the needs of the Netbook segment as well as handheld mobile Internet devices. These new products won’t have an expensive chip that was force-fed into a low-cost category – thereby depressing margins for the product manufacturers. Nor will these new products be powered by chips designed for other uses that compromise functionality. These new Intel chips are smaller, cheaper and very low power, but they are new building blocks sitting squarely within the Intel architecture – making them fully compatible with the Internet and tons of software. This will help device makers create products that bring us closer to having that no-compromise Internet experience on the go. Because Intel will use its latest 45 nm technology to drive these new energy-sipping puppies in high volume, and price them very aggressively, most analysts believe the PC makers will be able to make a decent return on Netbooks.
I don’t pretend that Netbooks will solve everything. To make these things as simple to use as an iPod, for example, we’ll need some work on user interfaces, as Rob Enderle has pointed out. And in much of the world, the broadband infrastructure is lacking to make Netbooks very practical. In parts of the world where a monthly subscription to high-speed Internet access costs $200, or where basic needs of clean water, food, access to health care and education are persistent challenges, the Netbook will not be nirvana.
I’d like to know what you think. Will this be an industry tipping point that helps bring many, many more people into the global web?
Comments (21)
tagged: 45nm, Atom, Classmate PC, eeePC, IntelAtom, iPhone, Netbook, OLPC, Silverthorne
Comments
Mar 03 | Rachit Chandra said:
As a computer science student and an ardent technology enthusiast from India, I see immense potentials for Netbooks in my country. With large sections of the society deprived of information, the hunger and need for it is immense. It is not just a market need but more of a social revolution in the making. The burgeoning cell phone market is proof enough. India might have few early adopters but I believe Netbooks can bring the second communication revolution in India
Mar 04 | Elia Rodriguez said:
interesting post. good food for thought - thank you.
Mar 04 | Paul Bergevin said:
@ Rachit. Your comment is very uplifting. I agree that creating new modes of access to information will transform the world for the better. There is so much human potential to unleash, as your thoughtful post makes clear. Thank you.
Mar 10 | Andy Russell said:
Hi Paul: The Netbook line sounds exciting. I’m wondering how Intel will differentiate it from the discontinued Psion NetBook and NetBook Pro sub-notebook-size hardware and operating system and if there is a naming conflict?
Mar 13 | Paul Bergevin said:
@Andy Thanks for your comments. In using the word netbook, we are describing that we think is an emerging new category, a different class of computer, as it were. Our Atom processors will help enable this category. Just as people use the word laptop or desktop very generically, we are using netbook. I am interested in how you see the Psion products positioned, Andy, but as we are not offering a branded line of computers here, I see no naming conflict.
Mar 26 | Yair Blustein said:
Wonderfull idea, win-win to all. Success will be dependant on massive spread of free wireless networks. How about a ‘Laptop On a Chip’ configuration? High R&D cost, Higher profits in the long run (New ‘Round’ for Intel’s abanoned ‘Total Solution’ discipline). What percentage of laptop users ‘upgrade’ their laptop’s hardware anyway? By the time upgrade is needed, it usually makes more sense to replace the laptop to one with newer technology. Really nice product design, a bit too feminine perhaps- in current color scheme. the product may be attractive to more people by offering it with different color schemes to choose from.
Mar 26 | Bill Richardson said:
Your Intel “2go PC” is all over the web but I can’t find anything official on Intel’s site. Please let a curious public know what’s going on! :)
I found your blog here: http://blog.laptopmag.com/is-the-2go-pc-the-classmate-2-ps-a-netbook-is-a-genre Thanks, Bill
Mar 27 | Paul Bergevin said:
@Bill. The 2go PC is a local (USA) OEM product made by CTL. You can find out more about this product at www.ctlcorp.com.
Thanks for your post.
Mar 28 | Bilim Haberleri said:
I agree that creating new modes of access to information will transform the world for the better. There is so much human potential to unleash, as your thoughtful post makes clear. Thank you.
Apr 01 | Nicholas said:
I am a 16 year old high-school student. Our school gives all the students Mac-book laptops to take home during the year. the problem is that most students use these laptops as giant word processing iPods (that also brows the web). Then because we are a public school they can’t afford a proper IT staff. So if you have a problem with your laptop then you have to wait. It may mean that you have no computer for the rest of the year or you miss a writing assignment and then the thing is fixed and life goes on. The teachers don’t care if a person is carrying a laptop by the display, but they get mad if your listening to music. Considering that these things are locked down and monitored with no one looking through the records. I like the concept of a netbook maybe running Ubuntu so with a user friendly interface. And maybe 4 gigs of storage so that students can only have some documents and bookmarks maybe a picture or two. I would also love one of these things because then I would be able to walk around downtown Phoenix and not be weighed down by a full size laptop.
Apr 11 | Aung said:
Out of curiosity, what is the difference between a UMPC and a netbook? I’ve researched a couple of websites and i’m still somewhat lost.
For example Hp2133, Asus Eee PC, Fujitsu U1010 (or U810 depending on where you’re living) are all considered UMPCs. All the mentioned above are light, low cost, and portabable hence ultra mobile. So do all these UMPCs fall under the category of a netbook?
Apr 11 | Bryan Betts said:
@Paul: Netbook is (or was) a trademark of Psion. The Netbook was a development of the Psion Series 7 and is very similar in concept to the Eee and its ilk - ie. a sub-A4 clamshell with VGA screen and a small but decent Qwerty keyboard.
I believe it was designed as a PC companion, but with a big advantage over most Wintel laptops - the OS is in RAM so it’s instant-on, like a PDA.
Sadly, the hardware and software look really dated now. Its main lack compared to today’s ultraportables is it wasn’t updated to support modern comms such as Bluetooth and WiFi.
Apr 13 | white niggo said:
It’s a great idea done computer only for internet. It’s help me in my study in univesity, i live in Ukraine, and I want that those Netbook come to us very fast. Sorry for my bad English
Apr 16 | mkeating said:
Sounds like a great idea and at that price would see good demand IMO. I can see myself investing in several units - one in the kitchen, living room, by the fireplace, each vehicle, etc. I’ve just discovered the utility and convenience of google apps; I see applications such as this as the wave of the future and the netbook would facilitate this transition very well.
M
Apr 17 | Diploma said:
I think that nowadays IT sphere is still developing, and the more offers we have the more people will be involved in the world of the Internet.
May 02 | daniel said:
hi im very interested in these famous netbooks, i would like to know where i can find them to buy one of it, i think its a great option for any person and even more because its price, if any one knows were i can find them and read more of it as a product that is sold, please post a comment, thanks Daniel, CCS-Venezuela
May 02 | Brian P said:
Though I consider myself a nerd and a geek, I honestly believe these items only appeal to that same niche group.
As items get larger, the convenience factor goes significantly down. As that convenience factor goes down, there has to be an exponentially increasing reason to want to carry it around - what extra benefits does a netbook give me that I can’t get from a Nokia E-series cell phone?
With that being said - what makes up the bulk of the area for these netbooks? A power hungry display that really isn’t big, per se, but larger than a phone screen. QWERTY keyboard to perform typing while it’s sitting on your lap or any other flat surface. Touchpad for cursor placement. These are all human interfaces which make up the majority of size and area, but do they really give me an exponential increase in functionality to offset the decreasing convenience factor? I’d argue that they do not. The convenience of the netbook is lost because I am forced to always carry around the large and bulky input and output accessories, which might only add worthwhile functionality less than half the time.
May 02 | Paul Bergevin said:
@Aung: UMPC’s are typically more of a handheld device, and not a clamshell design. The Asus EeePC is not a UMPC by that definition, although the terms and devices are sometimes misconstrued. But in general, netbooks are consumer-oriented and simple, affordable, internet centric clamshell design. UMPC are typically more expensive, not clamshell, business-oriented mobile device more similar to MIDs. In fact, while we have sometimes interchanged those two, MID is consumer (in your pocket) UMPC is business (in your pocket and slightly larger).
May 02 | Paul Bergevin said:
@mkeating: You describe a usage model in mature markets very well. I think of netbooks as a supplemental PC, an extra gadget geared for the Web. There will be other usage models in developing market economies as well, as some of the other posts suggest. Thank you for your comments
May 02 | Paul Bergevin said:
@Daniel: Quite a number of computer makers have announced designs for netbooks, which will start hitting the market in late May, early June and beyond. Asus and Acer, for example, have netbooks in final stages of development. Thanks for your interest.
May 09 | ike sonoy said:
So when can you see a mobile internet device powered by an Intel Atom that also has quad band communications technology? Have one? I’ll get one. ike