The death of the netbook

Analyst Opinion – I’m traveling this week and noted that the guy traveling next to me, who owns his own company, is using an Acer netbook. It is his primary travel computer.  He purchased a 12-cell aftermarket battery for it and gets 10 to 12 hours of battery life and, according to him, this is all he needs. Most of the analysts I travel with have noted that the distinction between netbooks and notebooks has largely vanished.    

I’m not arguing that this small form factor product is going away; I’m arguing that the netbook distinction is increasingly irrelevant because even the size difference is evaporating. And some new netbooks now outperform the majority of existing notebook computers.

What a netbook was

A netbook was initially a very limited small portable computer with a 7” low-resolution screen, a really cheap keyboard and touchpad, but a notebook-like product with a small amount of flash memory and running an operating system (initially Linux based) that was closer to an embedded product than a full OS. They were initially targeted at kids and the education market and they were intended to be wirelessly connected to a low cost wireless service where they would get most of their capacity and teachers could control the experience.   

They had names like OLPC and Classmate and they were supposed to come to market with a very aggressive price point initially believed to be around $100 and it was clear there wouldn’t be any adults using these for work.  But this isn’t how things turned out.

What netbooks are

A current netbook generally has a screen of 10” to 12” (artificially limited at the moment), 95% keyboards and good trouchpads, cost in the sub $700 range depending on configuration, Windows XP or Windows Vista, 80 GB or larger hard drives, and extended battery options that can, in some cases, exceed 12 hours.   

Some of these are subsidized and come with built in WAN (cellular) data bringing the price down below $200 (and in some cases to $0 with the monthly LAN charges).  Most have single-core processors and Intel integrated graphics, which makes them a little slow for many to use as their primary machine.

What netbooks are becoming

Over the next few months, more and more of these products will be arriving with either ATI graphics, dual-core processors are coming eliminating the current bottleneck and vendors are talking about a new class of hybrid drives which combine flash and magnetic media to significantly increase drive performance and related battery life. Windows 7 will be in production and the software actually runs very well on current generation netbooks.

In short, anything you want to do on a notebook, you will be able to do on a netbook.  And if you toss in the fact that screens are artificially being kept small – and that limitation is likely to be lifted – what is the difference then?

Wrapping up:  No difference

We’ve had small notebooks in the market since the mid 90s. My first was an HP Omnibook that I had in 1995, which was about the same size as a netbook with far less performance, battery life, and a cost that was 4x higher than that of netbooks. The only sustaining difference between netbooks and notebooks is you no longer pay a 1.5x to 2x premium for the same or less performance for a netbook.  Yes, today you often get less performance but the products costs less as well and, with the introduction of technologies like Nvidia Ion, that performance disadvantage has started to flip into a performance advantage.  

If you haven’t tried one of these puppies, check them out. Be aware they are constantly improving with the latest from Lenovo due in a few weeks with Ion and followed by another due by the end of October from Samsung. And then, I expect, we’ll see a raft of others that will forever close the gap between netbooks and notebooks, leaving room for smartbooks to take up the netbook cause.  

Yes, just when you thought it was safe to go into the stores, another form factor is coming: Smartbooks and Apple may actually have one of the first of these. What? You thought your choices were going to get easier?

Rob Enderle is one of the last Inquiry Analysts. Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them. Currently he provides his services to most of the major technology and media companies.

The opinions expressed in this commentary are solely those of the writer.