Thursday, April 2, 2009

Don't believe the netbook hype

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.


  1. But the main selling point of netbooks is also that, in the coming days, you'll probably be running your apps in a browser, / cloud. As long as you have a functional browser running reasonably fast on a netbook, you can doo all your word processing / lightweight spreadsheet stuff on, say, Google docs (either online or offline).

    I am saving my grad student pennies to get something cheap and lightweight ... since most of my coding is done via ssh login to a server anyway, a very portable book will be most suitable for my work. Of course, I don't represent the pc buyer demographic, but still there will be a lot of people interested in viewing facebook, youtube, and other web based stuff only. A netbook suffices for such people.

  2. That might work for you, but I question whether this is a substantial fraction of the computing market. We've heard the "all apps will run in the cloud" story before. This is a similar argument to what drove a lot of interest in "thin clients" in the 90's. The story goes that you can make a cheaper end-user device with stripped-down functionality, and the heavy lifting of the apps runs in a back-end server somewhere. Problem is, computers keep getting faster, smaller, and cheaper, so unless the "thin client" or "netbook" ends up being *substantially* cheaper/smaller/lower power (as in, an order of magnitude), and stays on that curve, most people would rather have the more powerful device in their lap.

    This is a technology-centric, not a user-centric view. I've never heard anyone claim that a netbook is actually *better* for some class of users than a regular laptop. At best it's a compromise.

    For around $500 you can get a full-fledged laptop (albeit a cheap one). Netbooks cost around $300. It's hard to make a case when the gap between the two is only $200 or so.

  3. I just bought my daughter an ASUS EEE. It's got an Intel Atom processor, 160GB disk, and WinXP pre-loaded for about $300. The keyboard is too small for me, but otherwise, it's a nice little machine.

  4. I just bought a Dell Mini 9. It's cute, and plenty fast for MS Office and other desktop stuff (yes emacs+latex is fine too). It does not require you to surrender to the cloud to be usable.

    But I think the "netbook" vs "laptop" debate isn't the point. What's interesting is that the netbook is a new signpost on the race to the bottom. The entire PC supply chain has had to surrender its margins, and they are in a death spiral of extreme commoditization. Netbooks were a new admission on this front: $200 retail gets you plenty of computer for most standard tasks, in a cute package to boot. And until we crack the multicore programming challenge, the benefits of Moore's Law will be invisible to most consumers. So users will have no incentive to upgrade, software developers have very little new power to drive innovation, and the only way to generate sales is via new packaging -- cellphones, netbooks (the bathroom PC!), etc.

    Meanwhile, cloud service companies are a locus of parallel programming expertise and innovation. So the positive feedback of hw/sw innovation seems likely to go faster on the server side. Home PCs are going to go through a serious wintertime before something new emerges.

  5. Arguably, what Joe and Greg are referring to are "small laptops", not what I was referring to as "netbooks", which are really more stripped down machines (can't run Windows, no hard drive, etc.) But the terminology is awfully fuzzy.

    Joe's clearly been drinking the PARLAB Kool-Aid!

  6. Joe's got it right. Look at the Macbook Air -- it's under-powered, but sexy and selling like hotcakes. Email, web surfing, and office-apps don't really take more horsepower than they did a few years ago. The same goes for the console market: a family is much more willing to pay $200 for a Wii and play games that are effectively a generation behind, than shell out $600 for a PS3.

    What's needed to reboot the desktop/laptop market is new, cycle-soaking, but useful applications. I'm not sure where that's going to come from...

  7. What applications DOES a netbook use? Can they run the Microsoft Office suite?


Startup Life: Three Months In

I've posted a story to Medium on what it's been like to work at a startup, after years at Google. Check it out here.