Wednesday, October 21, 2009 by dave
Categories: netbook

It is no secret that Netbooks – the small, ultra-portable and arguably underpowered cousins of larger, more powerful PC notebooks – have turned the PC industry on its head. Since Asus first ushered in the EeePC a few short years ago, the market has been flooded with a slew of netbooks. Today’s models are sporting larger screens, bigger keyboards, more memory and typically feature Windows XP as the de facto standard operating system. While Forrester Research declared an era of the third form factor back in January, the lines between netbooks and notebooks are increasingly blurring.

The key difference, as GigaOM recently posited, is that netbooks nail a sweet spot in the market where traditional notebooks often fall short on the 3P triangle: Performance, Price and Portability.

"Currently, a notebook can excel in one or two of these areas, but not all three… Enter netbooks: They provide enough horsepower to do the majority of everyday computing tasks, tend to average around $350, and are light and small enough to carry all day long."

Recognizing this ‘holy grail’ of computing, the November print issue of Wired magazine recently dubbed a netbook, the Samsung NC20, as its “computer of the year,” citing price ($550), ‘everyday’ performance (Via vs. Atom) and portability (3.3 lbs with a 12” screen) as its key selling points. [The only critical thing missing in this package may be the instant gratification of Splashtop to make portability even more pleasurable].

But given this year’s sweeping global recession, the most critical attribute thus far may in fact be Price-- cost-conscious consumers the world over have been snapping up netbooks at an amazing clip. Even the WSJ's Walt Mossberg has taken to reviewing netbooks, which he recently referred to as the sole bright spot in an otherwise awful economic climate. To put an even finer point on it, research firm DisplaySearch forecasts 33M netbooks shipping this year—2X over 2008—while notebook shipments have remained flat Y/Y for the first time. [See table below]

So on the eve of the Windows 7 roll-out, let’s take time to reflect on the 3Ps of netbook goodness, the potential impact of a new OS and imagine what might happen to this fast-changing product category over the coming months. On the positive side, look for more performance gains – new chip sets, bigger screens, more memory – and serious portability enhancements with longer battery life, better power management and smarter networking with integrated 3G. The question mark is around price – can PC makers keep upping performance and portability while maintaining the attractive price point that lured consumers in the first place? Or are we destined to see further blurring of the line between what makes a netbook vs. a traditional notebook?

Answer: “yes, but.” The “but” in this equation really depends on Windows 7. Unlike Vista, Win7 should run well on netbooks, according to Microsoft. But will it further the current trend of increasing screen size while maintaining affordability, a luxury afforded by XP-based netbooks. That remains to be seen – several reports indicate Windows 7 Starter OEM edition will cost $45-$55 per copy, which is OK for a new $1000+ notebook, but way out-of-whack for a $300-$500 netbook. While Amazon is currently showcasing an equal number of netbooks and notebooks shipping with Windows 7 (28 of each), it seems that price points have increased over comparable XP-editions. Using the popular Lenovo S10-2 as an example, a comparably-equipped netbook shipping with XP Home lists for $329, while the Win7 Starter version costs an extra $20.

At the end of the day, we at DeviceVM are extremely bullish on the future of netbooks as a distinct new form factor that deserves new “post-notebook” thinking. Regardless of which flavor of Windows suits your fancy or budget, the experience is made even better when complimented by an instant-on, web-enabled, browser-driven environment like Splashtop. And while Splashtop is currently shipping on flagship netbooks like the Lenovo S10-2 (referenced above) and S12, the new designer HP Mini 110 by Studio Tord Boontje, and the super-slick LG X130, we also look forward to sharing details of a new generation of devices from leading PC makers shipping robust new variations of Splashtop to complement the brand new Win7 environment. How will Splashtop fair in the Win7 world? Stay tuned…many more good things to come.