The NY Times is running an article today on the rise of netbooks, which are roughly defined as cheap laptops using low-power chips, sometimes without a hard drive. Of course, the terminology is fuzzy and confusing.
The article claims that netbooks are poised to eat into the conventional laptop and PC market in a big way, mainly because they're cheaper. I don't buy it.
The potential game-changer for netbooks is that companies traditionally associated with the cell phone market are bringing out new processors and other components that bring the cost and power consumption down. The low-cost and low-power ARM chips don't run Windows, so some netbooks run a stripped down version of Linux (though where did the NY Times get the idea that Linux costs $3 versus $25 for Windows XP?). And many current netbooks are too puny to run "real" applications -- by which I mean things like PowerPoint, games, or playing a DVD.
Now, I'm a big Linux advocate, but I don't buy the idea that just because netbooks are cheaper, they're going to take over a significant chunk of the market. If history has taught us anything, it's clear that Intel and Microsoft will bring down their prices and power consumption profiles to compete in this space. At the end of the day, it's software that sells devices, not price or power consumption. It's wrongheaded to take the technology-centric view that because the technology changes, users will follow suit and go along with a stripped-down sub-laptop that can't run real software. We've seen this before (anybody remember WebTV?) and it hasn't worked out. The Nokia n770 "Internet Tablets" are another classic example of a device that never took off in a significant way -- just because you can build something like this, doesn't mean that anybody wants it.
So I think the industry should look at where netbooks fit in with user needs. I'm hoping Apple does a netbook (a rumor that keeps circulating) since the iPhone OS is, in many ways, an ideal netbook platform -- and the amazing growth of the iPhone app market says a lot about its capabilities. And, knowing Apple, they'll put the user first, rather than the technology.
Update: David Pogue has a great video on the Great Netbook Compromise.
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