Why the Linux netbook crashed and burned

Why the Linux netbook crashed and burned

Summary: I say the Linux netbook was rubbed out by Microsoft with an Intel chip in the CFO's office.

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A friend of mine, Tom Henderson, asked recently, Who killed the netbook? His well-thought out answer blames a combination of smartphones; expensive, but lightweight computers like the MacBook Air; and the rise of tablets. I think all those played a role, but I put more of the blame on Microsoft and Intel.

While I'd say netbook are dying rather than dead, I have to agree they certainly aren't as popular as they once were. As Ranjit Atwal, research director at Gartner, recently said in a statement. "Mini-notebook [Netbook] shipments have noticeably contracted over the last several quarters.” More to the point, the vendors are agreeing with the analysts. Lenovo president and COO Rory Read recently said “Netbooks are pretty much over.

I think netbooks—small, inexpensive notebooks--are declining because Microsoft and Intel have finally succeed in weaning original equipment manufacturers (OEM)s away from Linux and low-end—with corresponding low profit margins –hardware.

This was always Microsoft's plan since they first were cold-cocked by the sudden explosion of customer interest in netbooks. When netbooks first came along, they almost all ran Linux. Microsoft, which was then stuck with the resource pig known as Windows Vista, simply couldn't compete. So, reluctantly, Microsoft gave Windows XP Home a new lease on life and sold it below cost to OEMs to kill the Linux desktop on netbooks.

They were successful. Mind you, the last thing Microsoft wanted was for people to keep using XP. They wanted, oh how they wanted, users to turn to Vista. But, they also didn't want to turn over the low-end to Linux. So, instead they dumped XP Home to OEMs at below cost to chase Linux off netboooks. It worked.

The way things were going to go was clear in June 2009 when, I kid you not, Asus’ chairman, Jonney Shih, after sharing a news conference stage with Microsoft corporate VP, OEM Division, Steven Guggenheimer, apologized for showing an Androd-Linux Eee netbook the previous day.

Mission accomplished, Microsoft finally shut down the XP production line on netbooks on October 22nd, 2010. Today, you can still get XP via the downgrade route from some versions of Windows 7, but you can't do it for netbooks.

Today's netbooks almost all run Windows 7 Starter Edition. Or, as I like to call Windows 7 SE: Crippleware. Seriously, if you want Windows, more power to you, but get at least Windows 7 Home Premium.

As for Intel, even though their Atom processors powered the netbooks into popularity, they were never crazy about it. After all, every Atom-powered netbook sold was one less Pentium Dual Core laptop that could have been sold at a higher price and higher margin. From the very start, Intel wasn't crazy about netbooks. Back in 2008, Stu Pann, then Intel's VP in the sales and marketing group said, "If you've ever used a Netbook and used a 10-inch screen size--it's fine for an hour. It's not something you're going to use day in and day out..

So, if you ever wondered why it is you can't find a $200 Linux-powered netbook from a brand name OEM these days, now you know. It really was Microsoft with an Intel chip in the CFO's office.

Oh, and Chromebooks? They're playing a different game. Google doesn't want them to be the low-price laptop replacement. Google wants Chromebooks to be the relatively low-cost replacement for your day-in/day-out business desktop/laptop needs.

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Topics: Hardware, Intel, Linux, Microsoft, Mobility, Open Source, Operating Systems, Software

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227 comments
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  • The full featured, 15.6 inch, $400 laptop killed it.

    You can try to blame MS all you want, but as the price of a full featured laptop fell, getting a netbook (with any OS) became less attractive. The non tech users I know were getting them because it was the cheapest way to get a laptop. The techies who were looking for a portable consumption device moved to the iPad.
    Sorry, the linux netbook failed for the same reason the linux desktop has not taken off, it?s not Windows, and that's what the non tech consumer expects on a device that looks like a laptop.
    pmcgrath@...
    • Look at the facts.

      @pmcgrath@...
      Why do you think Microsoft puts restrictions on OSes and hardware that can run on netbooks?

      Answer: Because that is what OEMs have to do in order to qualify for the predatory pricing in the form of rebates/subsidies on Windows, which effectively pays OEMs not to preload Linux. Of course if Microsoft can't do that without going out of business if it applies to all Windows preloads, so Microsoft has to apply the predatory pricing to a segment Microsoft specifies as a Netbook, while Microsoft tax levied on Microsoft's more expensive computers where Microsoft enjoyed a monopoly pays for the subsidy to keep Linux from being preloaded onto netbooks.

      Linux netbooks stopped selling not because customers stopped buying, but because OEMs stopped selling Linux in retail outlets, and stopped advertising Linux - all things directly impacted by Microsoft's Windows and advertising rebates.
      Mah
      • RE: Why the Linux netbook crashed and burned

        @Mah

        So a free OS can't compete. Couldn't be its functionality, its multiple toy UIs, multiple distros, lack of applications (all of which are just copies of proprietary apps), no games and its rabid support by hobbists.

        Its a dead parrot. No matter how many supercomputers, iPhone copies or crappy PVRs it runs, it's still dead on the desktop. Twenty years and still not 1% usage.

        I think reality has proved you wrong SJVN, so start working on a device to get you to that parallel universe you seem to have visions of ;-)
        tonymcs@...
      • RE: Why the Linux netbook crashed and burned

        @tonymcs
        There are more lies than words in this post. Amazing.
        kirovs@...
      • "not because customers stopped buying"

        @Mah
        Uh, check the figures. Linux netbooks never really sold. Major retailers never had more than 1% or so of their models with Linux. Why? No demand.

        By the way, when a Linux netbook was returned, it wasn't usually because it was defective, the customer realized that it didn't work with Windows so they sent it back.

        Nice raft of FUD that hides the truth. Just not enough people wanted a Linux desktop for the vendors to make money.
        Cynical99
      • In a moment I forgot what OS you were talking about...

        @tonymcs@.. and thought you were talking about Windows Phone 7, and it's functionality, it's multiple toy UI's (XNA, Silverlight), multiple distros (normal, "upgraded", Mango), lack of applications (all of which are just copies of proprietary apps)... and rabid support by hobbists (aka Loyalists)...<br><br>Of course, WP7 is filled with games, XBox Live games. But does that make a great OS. I guess not.<br><br>It's a dead parrot... no mattter how many... iPhone copies or crappy PVR (aka Windows Media Center), its dead... Twenty years from now only 1% usage.<br><br>Guess you'll react differently if it comes from MS, and say that the marketplace is "growing on an increible pace". Or that it has an "innovative" UI.<br><br><i>He who kills by sword, by sword may he die.</i>
        cosuna
      • @ Cosuna

        You obviously don't know what you're talking about. WP7 has ONE UI, the live tile system. You're talking about development tools. You're also referring to updates as Distros, which is a good laugh.

        Come back when you know what you're talking about, you ignorant troll.
        Michael Alan Goff
      • RE: Why the Linux netbook crashed and burned

        @Mah I had one user that bought a Ubuntu based notebook, got it home and couldn't figure out what the heck was going on. Yeah, they were more than a bit dim for not realizing that it didn't have Windows on it, but Ubuntu just wasn't going to work for them. I put XP on there and they were so happy they had a computer that actually worked.

        People don't want Linux on their computer. I have nothing against the OS and I run several servers with SuSe Linux and am very pleased with it, but I have yet to meet anybody that wanted to put Linux on their computer as their main OS.
        boomchuck1
      • RE: Why the Linux netbook crashed and burned

        @Mah Not quite. Places like Walmart were getting too many returns on the Linux models. People go with what they know (see iPad) and being first out of the gate gains this advantage most times. Most people know MS, for good or for bad.
        happyharry_z
    • RE: Why the Linux netbook crashed and burned

      @pmcgrath@... Yes, you can name a dozen reason for the failure of linux netbooks without once mentioning Microsoft.

      1. The rise of the tablet.
      2. The underperforming nature of the atom processor relative to other non-atom processors
      3. the price drop of better fully-featured laptops
      4. The disinterest in the platform
      5. shortcomings of the platform, including poor driver support with linux distributions at the time.

      And others.
      Your Non Advocate
      • Fantastic analysis!

        @facebook@...

        All the reasons you cited and in that order. Seriously, I'm impressed.
        kenosha77a
      • RE: Why the Linux netbook crashed and burned

        @facebook@... <br>I would consider the possibility that lower-priced fully-featured laptops was a response to the erosion of the market from the low end. Put another way, the success of the cheaper, less-featured netbooks running Windows meant notebook OEMs had to lower price because 50 to 70% of the essential value, a screen to view the web, a keyboard to type, Windows to run apps, was provided at 1/2 to 1/3d of the price.<br><br>In the first year, Linux share on netbooks was over 50%. In the second year, it had been reduced drastically, and one saw the evidence of marketing money Microsoft spent in order to subsidize the costs. Add that consumers get Windows as a brand, and budget pc OEMs are only interested in packaging components around someone else's os, and there's the formula.<br><br>Netbooks were doing okay, and growing first as generally Linux and then generally as XP or Win7 Starter, until the year before the iPad hit. Since the iPad launch, pc growth in total has been negative and netbooks, which in 2009 were considered the sector that any computer manufacturer HAD to be in or face doom, are not quite the must-have.<br><br>Since Microsoft, Intel, and the OEMs all take very low margins on the things, no one is shedding a tear.<br><br>There are complexities, but the timing is curious.
        DannyO_0x98
      • RE: Why the Linux netbook crashed and burned

        @facebook@...

        <uL><l>I would consider the possibility that lower-priced fully-featured laptops was a response to the erosion of the market from the low end</l></ul>

        I would have tended to agree if not for the ascension of the tablet and smartphones, as well as the "death of the pc" relative to the rise of notebook sales. Economies of scale in the manufacturing components had more to do with the overall market than just the netbook submarket.

        And, again, as far as blaming Microsoft for the drastic reduction in Linux share, it is far more complicated. Return rates on linux based netbooks when compared to windows netbooks indicate a general disinterest in the platform. People bought them, found it they could not use Microsoft Office 2007 and returned them. Enough said. That Microsoft extended the life of Windows XP and captured additional OEM sales is secondary to the disinterest of the consumer.
        Your Non Advocate
      • RE: Why the Linux netbook crashed and burned

        @facebook@...
        Add in the miserable undersized keyboard!
        boomchuck1
      • RE: Why the Linux netbook crashed and burned

        @facebook@...
        and the 600 line screen :-(
        PassingWind
      • RE: Why the Linux netbook crashed and burned

        @facebook@...

        The rise of the tablet... and more powerful mobile devices. Few years ago, I bought an HP mini for email, Facebook and other tasks I need to do while I'm on holidays. Today, any decent mobile device (like an iPhone) can do that.

        I don't agree to blame Microsoft, Linux complex world can vanish itself alone. The main fact here is the primary usage of a Netbook (mine at least): something powerful enough to complete simple task, very light and portable, with enough power to survive to an intercontinental flight.

        Even if I work in IT, I don't want to spent time on my laptop to make it easy to use for my wife and kids. Training them on Linux is not an option! Can I have pleasant holidays after all?

        When the mini will be dead, the tablet will be THE holiday gizmo and it won't run a Windows OS neither.
        alainforget
    • I have a mini, a 15

      @pmcgrath@... <br>The mini is still my favorite to carry around.<br>When they get a 1-1/2 lb "full featured 15" with 8 hour battery life I'll put away the mini. The tablets will be full featured and low priced before this happens.
      kd5auq
    • It's probably a bit more complicated than that

      @pmcgrath@...

      I don't blame the failure, or maybe I should call it some folks' failed expectations, solely on Microsoft. Further more it's not a failure, because even though the outcome success isn't strictly desktop Linux, it got the industry even more interested in Linux based solutions. I'm not only referring to Android, but we also have Meego that despite Intel's ambivalence and Nokia's sudden change of strategy (or maybe not so sudden since it looks like it had been a "secret" plan between some part of Nokia and Microsoft for quite some time), and other projects as well.

      Anyway if we treat it as a failure there's several factors that play a role:
      - first generation of Intel hardware is in a sense terrible
      - all Linux netbooks available where I live had inferior hardware to the Windows offerings at the same price (how does that add out?)
      - I agree with the author about Intel's dilemma in supporting such devices, because it become an invitation for ARM based devices, something I suspect played a role in why Intel didn't handle what became MeeGo efficiently enough
      - manufacturers providing netbooks with Linux didn't understand how to best communicate and take advantage of the communities, and instead choose at the time pretty bad and ugly solutions (how many previous Linux users kept the pre installed OS?)
      - would something like MeeGo been in place at launch I strongly believe it would have got a far better start

      I wouldn't blame Microsoft for any failure, because I don't expect any "nice" strategies when it comes to money. I might still dislike how Microsoft manage to delay technology development though, but that's a wider problem applicable to a lot of things beyond netbooks.
      KimTjik
      • Failed expectations is right.

        @KimTjik I think the netbook always should have been a niche product that many people set too high expectations for. As soon as I saw them I immediately said to myself, "well, that's cool but looking at the hardware specs its not for me". I think its niche will actually continue, particularly with the newer generation of dual core Atom processors. As long as the buyer knows what they are getting and fits the niche for the product its great. I think a lot of people bought these thinking what they were getting was just a regular laptop in a smaller form factor - which is not really what it is.
        cornpie
      • RE: Why the Linux netbook crashed and burned

        @KimTjik - "- all Linux netbooks available where I live had inferior hardware to the Windows offerings at the same price (how does that add out?)"

        That adds out for just the reasons cited in the article... MS offered deeply discounted prices to vendors for WinXP netbooks as well as rebate programs etc to subsidize them and make it possible for WinXP netbooks with a beefier hardware platforms (needed to run XP) to compete with the netbooks.

        @Cynical99 and boomchuck1

        The vendors dropped the ball on this one as well by only giving Linux powered netbooks half hearted support. (Some of these marketing decisions were also the effect of MS influence.) You can't blame Linux for disappointing an uninformed consumer by not being windows. I can pretty much bet that any consumer who was ill informed about the netbook as to only find out it wasn't windows until after they got it home, probably didn't spend very long with it to find out if that was a good thing or a bad thing... they just took it back and got the windows one.

        If OEMs and retailers had spent ANY effort on marketing the Linux netbooks as an alternative to WinXP netbooks, they might have still under sold the Windows netbooks, but the sales might have been higher and the return rate might have been lower. After all, Android tablets and phones are outselling Windows and there isn't that big of a return rate in spite of them running Linux.

        In a nutshell: Netbooks running linux or windows sucked. They were not very powerful, couldn't play games (should have leveled the playing field for Linux there), lacked CD or DVD, had a tiny keyboard and screen. Their only advantages over a notebook was low cost, lightweight, and long battery life and many came with internet data plans and built in modems making them more of an appliance for portable computing and web surfing. Because of this, Linux should have been marketed as a plus on this platform due to security and low maintenance. OEMs should have worked to use Linux as a plus rather than to have the fact that some of them were running Linux so obscured that anyone could walk out of the store with one and not know till they got it home that it wasn't running Windows. The fact that that ever even happened is proof that OEMs and vendors didn't invest anything into marketing Linux. Most people know when they buy an Android tablet that its not an Ipad or windows. They buy it because it IS Android not because they thought it was the same as windows.
        techadmin.cc@...