The Netbooks are coming: Laptop cannibalization today; Smartphone war tomorrow?

The Netbooks are coming: Laptop cannibalization today; Smartphone war tomorrow?

Summary: The message out of Computex this week is loud and clear: The Netbooks are coming. Intel is touting its Atom processor.


The message out of Computex this week is loud and clear: The Netbooks are coming. Intel is touting its Atom processor. Acer is on the board with its Aspire one. Microsoft is adapting Windows to the Netbook market. Nvidia says Netbooks will be graphics intensive. The big question: Are buyers as enthusiastic as the vendors?

That question looms large--and I've raised it before. Mobile Internet devices, Netbooks, UMPCs are all based on the same thing--cheap devices that are designed to simply access the Internet, check email and provide on-the-go connectivity. Our resident education blogger Christopher Dawson sees these Netbooks as the next big thing.

Also see: Gallery: Computex focuses on smaller, cheaper laptops (right)

The conundrum: Smartphones are beginning to occupy the same turf that Netbooks are targeting. Communication devices (phones) are morphing into full fledged computing devices and computing devices that are becoming communication tools. Meanwhile, both categories cost about the same. So Mr. and Ms. IT buyer what's it gonna be: Your iPhone or a Netbook? These categories are meeting in the middle and these devices will increasingly become comparable--especially as phones are used for data more than voice. Perhaps you'll buy both types of devices, but I doubt it. Can you really lug a laptop, smartphone and mobile Internet device around. Will you leave your laptop at home for something that has less computing power? How many devices--even at $399 a pop--will you choose to own?

Each answer will depend on your situation and you have some time. For now let's recap the news:

acer.pngOn Tuesday, Acer unveiled its Aspire one, an "all-new communication device designed to make online activities fast, simple and cool," according to a statement. I read that to mean that Acer is cooking up something to compete with the Eee PC. Acer's Aspire one promises to deliver Internet access anywhere and weighs in at less than 2 pounds. It's smaller than the average office diary--9.8-inches x 6.7-inches x 1.14-inches. It has WiFi and "may be specified with 3G wireless technology." The interface of choice is Linux--Linpus to be exact and device runs on Intel's Atom processor. Looks snazzy and starts at $399. Windows XP home can also be installed. If Acer's effort sounds a lot like the Eee PC that's because it is. As's Erica Ogg notes, Acer wants to be a Netbook leader (Techmeme).

Intel's Atom processors are also now widely available and more than 100 products being built on the platform are being highlighted at Computex (Techmeme). Intel's Sean Maloney, the company's sales and marketing chief, gave the Computex keynote and said: "Individuals - not households - will drive the next era of growth with people each owning one or more computing devices."

Microsoft said Tuesday that it is extending Windows to Netbooks (statement, Techmeme), or ultra-low-cost PCs. (Can we agree on one acronym or moniker here?) Microsoft said it has 20 OEMs that are putting Windows on Netbooks--XP in most cases. Among the OEMs on board: Acer, ASUSTek Computer Inc., BenQ Corp., Dell Inc., First International Computer Inc., Gigabyte Technology Co. Ltd., HP, Inventec Corp., Lenovo, Medion AG, Micro-Star International Co., Positivo Informatica, Pegatron Corp., Quanta Computer Inc. and Wistron Corp. It should be noted that the Eee PC with XP is very popular. For Microsoft the goal is simple: Make sure these Netbooks aren't solely in the Linux camp.

And on Monday, Nvidia made it official: The company is going after the smartphone and mobile Internet device market with Tegra, what is billed as the company's high definition computer on a chip. The general idea: These Netbooks will be high definition items and that will require some graphics horsepower.

So what are we learning from all of these announcements? Here are my takeaways:

  • A lot of vendors see Netbooks as a huge market and are making big bets.
  • Aside from the Eee PC I haven't seen a lot of pent-up demand.
  • Vendors seem to believe that Netbooks are a new category. In some respects, that's true. However, I reckon that Netbooks will cannibalize laptop sales to some degree initially before the smartphone vs. Netbook battle sets up.
  • As we've learned with the MacBook Air these devices that rely on constant connections do have a few drawbacks. But hey you have to sacrifice something to hit the small and light targets.
  • Price points will matter. At $399 I'm interested in one of these devices as a second laptop or something to have around the house. Above that price my interest wanes dramatically. Overall the right price to really stoke demand is probably in the $200 range.

What are your thoughts? Are you coming around to Netbooks? Salivating for one?

Topics: Operating Systems, Hardware, Mobility, Smartphones, Software, Windows

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Netbooks and Smartphones

    Those keyboards on the smartphones are just too small for me to use effectively. I'll take a netbook and a cheap cellphone.
    R.L. Parson
    • I agree!

      I use my smartphone to ck email, short ims & txt addition to making my phonecalls. The keys r too small & uncomfortable for anything else. I'll be in for a netbook in the next few months for portable wifi & typing docs. Bigger screen & keyboard!
    • Keyboards

      I used to feel like you do about small keyboards, but I'm typing this
      on a VERY small iPod Touch keyboard, and it's not nearly as bad
      as I first thought it was. It just takes a little getting used to. Sure, I
      wouldn't want to type a novel on it, but for e-mails and stuff like
      this, it works surprisingly well.
    • Yes, I want one!

      I'm a smallish person so light weight is a key feature. I like the concept that it's the size of a day planner. Other key features: "real" screen & keyboard, long battery life, rapid startup. I could replace my laptop and planner for traveling. I'd load photos, making it easy to show photos at spur of the moment anywhere (instead of on tiny camera screen). Integrated GPS would be a reeeally nice natural addition since it's so portable!
  • RE: The Netbooks are coming: Laptop cannibalization today; Smartphone war t

    I still see netbooks and smartphones as separate categories. You would not want to type this post on a smartphone, but could easily do so on a netbook.
    The latter is great specifically for travel and conferences.
    Zoli Erdos
    • Well, the biggest problem with the smart phone is the keyboard. If you

      could carry a little folding keyboard for when you want to sit down and reply to email that might do the trick for many. So, with a folding keyboard, smart phones might be very competitive with a netbook for at least the younger generation with very good eyesight that can tolerate small though high resolution screens.

      The smart phone having the advantage of much better portability.
      • Donnie - Maybe TOO Much Portability?

        I got to tell you, man, the idea of plugging a keyboard into my smartphone sort of strikes me as right up there w/Steve Woziniak's "rotary-dial mobile phone"! ;)

        Though if you're comfortable w/squinting at a tiny screen and using a smartphone's features for e-mail, word processing and Web surfing like a UMPC offers, then more power to you - I just find it too hard to manage, is all.
  • For those that want a "big enough" screen and keyboard, the NetBook will

    be the winner with a separate, simple phone. But, many will want both, since the NetBook is still way too big to fit on your belt.

    Myself, I want at least three rows of keys with space bar and alt/fn/ctl below. It can be a lot smaller than a standard laptop keyboard by eliminating the rows of numbers and functions keys, and making them accessible through and fn key combination.
  • Also, PLEASE try to give VIA a little credit here. They DO have a very

    good new chip set and processor to compete in this area. Also, AMD does have the Geode chip, and you could at least mention them and what they have.

    Myself, I would love to see a power sipping dual core 500 MHz ARM design in this product category, with a sunlight readable 12 inch screen based on OLPC technology. An internal SD slot instead of hard drive, and NO optical drive. And, of course 12 hour battery life.

    The days of hard drives in this category are numbered.
  • Competition is very nice ...

    "For Microsoft the goal is simple: Make sure these Netbooks aren???t solely in the Linux camp."

    So the offering is a seven year old deprecated OS with limitations on the hardware in order to receive discount pricing? So the manufacturers are looking to the future with ultralight inexpensive notebooks while Microsoft pulls them back into the past? I guess this is what Microsoft calls "innovation", aye?

    Thanks, but no thanks. Give me some Kubuntu, Ubuntu, Xubuntu, Debian goodness over XP any day. ;)
    • Yes, Linux will enjoy a much higher market share in the NetBook category

      than on larger laptops and desktops. I would imagine that it will be at least 25%, maybe as high as 50%. But, at the smart phone level, Linux market share could be 50% to 75%.

      But, many will select XP out of familiarity, no matter how good the Linux alternatives are.
      • As the saying goes ...

        [i]But, many will select XP out of familiarity, no matter how good the Linux alternatives are.[/i]

        "Familiarity breeds contempt, while rarity wins admiration." - Apuleius
      • Yes, Linux...

        True, some will always choose Windows. But the geek gap is narrowing for alternative OSs thanks to Ubuntu. Applications are not an issue thanks to OpenOffice. The only gap is support for drivers.
    • LOLOLOL @ MisterMiester!

      Yeah - I have to admit, the idea of trying to run XP Home on my EEE PC is kinda hilarious in a "Going On a Two-Week Camping Holiday Using My Wife's Honda Civic Hybrid" kind of way. Nothing against the Civic Hybrid - it's a great little car that gets spectacular gas mileage, and we both really love driving it - but you don't want to be weighing it down with a bunch of crap....
  • Instant-on?

    The only other improvement would be instant on capability. Perhaps Netbooks will offer phone capabilites , or somehow connect with a cheap phone, but they do best what PDAs and smartphones set out to do.
  • One more blasted thing to maintain

    I don't know about you folks, but just keeping the batteries charged on all of these gadgets is killing me. Further, keeping all of the data in sync takes more time than I gain in productivity. I'm a gadget guy, and I just don't see the need for a new device.

    Whatever the next form factor is, it will need to replace something that I already have. The jury is out on whether a netbook will allow me to relegate my laptop to the closet.
  • RE: The Netbooks are coming: Laptop cannibalization today; Smartphone war t

    Netbooks would be useful to me and maybe to many other
    people, if they would work as a phone also, perhaps with
    blue tooth headgear. But even so, the idea is not very

    I am still in favor of carrying an iPhone and a laptop, a
    MacBook Pro, so I will not have to sacrifice anything.
    Gyula Bognar
  • RE: The Netbooks are coming: Laptop cannibalization today; Smartphone war t

    For me personally, I would say that my smart phone (I have an <a href="">HTC XV6900</a>) has already drastically cut into my use of my laptop as a mobile device. Where I would break out my laptop at an airport terminal to check email now I use my smart phone and think using a laptop in this type of situation is WAY too much work.
  • RE: The Netbooks are coming: Laptop cannibalization today; Smartphone war tomorrow?

    Why lightweight is desirable, small screens and keyboards are not.

    So other then lightweight, what is gained?

    Is there a major increase in battery life to offset the small size? If not, why bother?
  • RE: The Netbooks are coming: Laptop cannibalization today; Smartphone war t

    In asia these devices are bought by college students who cannot afford real laptops for schools and by new graduates just job hunting or in entry level jobs.

    Bosses still use smartphones like an e61i or e90 for access since its easier to carry around. If there is a unit that is both a netbook and a cell phone in one then that may take off. Lugging 2 pieces of incompatible hardware is just not practical enough.

    wait for them when they are extremely discounted like $99 after rebates. maybe worth it.