Well yes, that's exactly what they were. Few people if offered a Netbook and a Laptop at the same price choose the Netbook.
I think the iPad is largely irrelevant here, it's a different animal. You actually NEED a computer already to use one. There is some crossover but it's pretty small.
It is the falling price of laptops that have eaten the Netbook market. Weirdly Windows 7 hasn't helped. While many people will tell you that Windows 7 runs fine on a Netbook the actual truth is rather different. Buyers have seen Windows 7 and on the whole like it, they'll spend a little extra on a system that can make a decent stab at running it - buyers are CHOOSING to buy a nicer system so they can run Windows 7.
It is probably the falling prices of Laptops AND the willingness of buyers to pay a little more to get Windows 7 (rather than XP) that will kill off the Netbook. I'm sure nobody will be happier than Microsoft.
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