Netbook – hype or reality?

Since the 2nd half of 2008, netbooks are getting a lot of attention. Are they really a major change in market direction, or just a new name for the lackluster subnotebook or UMPC categories? What strategic impacts will this have on the PC or phone markets?

Hardware characteristics

Netbooks don’t have an agreed definition, but there seems to be consensus that they have all or most of the following characteristics:

  • a low-power processor (often the Intel Atom, but not necessarily x86 compatible)
  • a display size of up to 10.2 inches (notebook screens are 12-17 inches). It can be argued that resolution is ultimately more important than physical size. Typical resolution is currently 1024×600 for the largest screen sizes.
  • a small physical size (and consequently smaller keyboard and lower weight)
  • wireless Internet connectivity (WLAN, but possibly a form of cellular connectivity like UMTS)
  • a Solid State Disk (SSD) to replace a larger hard disk
  • unessential features removed. Examples: no CD/DVD drive, no PCMCIA slot, no docking station support. The lack of an optical drive can be solved using a USB-based optical drive when needed.

In short, most of the specs look like those of an older notebook, but in a physically smaller form factor: the processor is a bit slowish, the resolution is quite low and the amount of memory and hard drive space are typically low to reduce cost. In fact, older notebooks tended to be physically a bit smaller than the current notebooks (but not as small as many netbooks).

Sometimes Redfly is also called a netbook, but it is essentially a terminal or docking station for a mobile phone: the smartphone’s microprocessor and software do all the work, and the Redfly just provides a larger keyboard and screen. The two devices can be conneced via a wire (USB) or wirelessly (Bluetooth).

Software characteristics

It sometimes claimed that a netbook needs an x86-compatible processor (meaning from Intel or from Via). Which implies that it is just like any other notebook – only smaller – and that it will likely be expected and used to run Microsoft Windows (e.g. XP or – according to Microsoft – any recent/future version).

The key question is whether a device with a non-x86 processor (and corresponding lack of hardware standardization) will sell well. These devices will need to run a form of Linux (as Windows currently only support x86 processors). The question whether the mass market wants Linux on the desktop is again an old  question. A vendor that bets on an ARM or MIPS processor is essentially betting on Linux. And, unless the vendor manages to get a large enough installed base to become a platform at the binary level (Apple style), is likely to end up with a small market (a kind of viscous circle). Assuming the fragmented market model, you have two groups of target consumers:

  • people happy with the pre-installed software, and not caring about adding anything else (“Aunt Elisabeth”). For them it may be an appliance, just like a digital foto frame, but one for E-mail and the Internet.
  • technically savy people who have the know-how, time and energy to tinker with the details of the system (“tweakers” and “nerds”). In an extreme case, they buy the netbook for the hardware and provide their own software. 

Benefits and disadvantages

  • + smaller size, more portability
  • + lower cost
  • – low performance (e.g. limited used for gaming, photo editing, word processing)
  • – limited ergonomics due to small screen (e.g. 1024×600) and small keyboard

There is a potential for lower battery power due to the lighter processor and smaller display (backlighting). This may, in practice, be partly negated if the vendor reduces the battery size to match the device’s smaller volume, weight and cost.

The underlying premise is that for an increasing number of uses, the devices is essentially a terminal to the internet rather than a general purpose computer.

One current issue is that Internet is a driving application, but web sites are designed for larger display sizes of at least 1024×768. This can change due to adopted web pages (unlikely) or higher screen resolutions by using smaller pixels (easily feasible).

Market acceptance

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