Discussions

"Netbooks" is the fastest growing PC category in the past year and we expect this to continue in 2009. However, in the near future, there is a good chance that netbooks as we know them will cease to exist. Before I go on to explain what I mean by this, let's give this post some context: the term "Netbooks" has a vague definition, but I understand it as meaning "computer that is just good enough to browse the web". It seems like a definition that most of us can agree on.
 
Asus created this category with its Eee PC. The concept is simple: offer a very small, very cheap ($300) laptop that's just powerful enough to run a web browser on a more or less exotic Linux-based operating system. Originally thought to be a product for developing countries, it became a hit in developed markets. Customers soon demanded a Windows XP version, and so Asus and Microsoft obliged.
 
Back to our original idea: why would the notion of "Netbooks" fade away? Cheap and small laptops are here to stay, but I think that that idea of a "computer that is just good enough to browse the web" will go away, unless the Netbooks are built in a radically different way.
 
The reason is that the next generation of "Netbooks" hardware platform will be powerful enough to transform "Netbooks" into fully-featured "Laptops" capable of playing HD content stored on decently sized hard-drive and displayed on a 12" or 13" laptop. That sounds more like a "Laptop" than a "Netbook", right? Well, that's where we're going, and we think that a $500-$700 ultra-thin computer with a large battery life (current netbooks can top 9 hours, according to the manufacturers) will be immensely successful. Basically, hardware improvements couple with mostly stagnant needs (web, email, IM, MP3, Video) will turn "Netbooks" into "Laptops" and this will happen over the next 18 months. Prices will subsequently go lower, thanks to advances in manufacturing, competition or even subsidies from wireless carrier or internet providers. To maintain prices and margins, manufacturers will have to make these computers even better and more capable, making them look less and less like the original "Netbook".
 
But there is still a chance that the notion of "Netbook" can survive, at least for a short while: it can jump to a different hardware platform. Current Netbooks are built on a "PC" platform, which is similar to laptops, but optimized for a lower cost. The next generation of "web-only" capable computers might run on a "cellphone" platform. Imagine having cellphone hardware in a 10" or 12" laptop body. First, that Netbook would be truly "instant-on", just like a phone. It is also connected and capable of basic productivity tasks like web browsing, email, IM, Skype and so on... Finally, that form-factor uses much less power than a PC platform. Only by jumping onto another platform, the notion of a web-only computer can survive... only if the price is right. And that might be a big problem. a PC-based design uses components and processes that are already mass-produced and it's not clear if someone will be able to pull-off an ARM-based design at a very low price. My Curve 8900 costs $500 without a contract.
 
The idea of having a computer running on a cellphone hardware is interesting, but I admit that I don't believe that a very cheap design ($300) will come out soon, so I'm currently more interested by a $500-$700 ultra-slim PC with 9 to 10 hours of battery life and a relatively large display (12"-13"). I want a desktop OS, may be a touch display and I want to install a bunch of little "PC" apps that I have become accustomed to.What do you think and most importantly, what do you want?