Hybrid tablets-netbooks to be niche

Two-in-one devices combining tablet and netbook experience are "complicated" to market and more costly than non-hybrid counterparts, making them appeal only to niche segment, analyst says.
Written by Liau Yun Qing, Contributor

Riding on the tablet wave, PC makers are coming up with hybrid products which combine the tablet's touch-screen experience with a netbook's physical keyboard. However, these devices will not receive mass adoption due to pricing and the complexity in marketing, observed analysts.

Hybrid mobile computers combine the form factor of a tablet and a netbook on the same machine. Users can turn the device from a tablet into a netbook, and vice versa, in a few steps. The product category has gained much attention recently, with a number of computer makers showing off models at the Consumer Electronics Show (CES) last week.

Taiwanese PC maker Asus featured a Google Android tablet with a pullout keyboard called the Eee Pad Slider, while Korean electronics giant Samsung showcased the Sliding PC 7, a Microsoft Windows tablet that looks like a netbook when its keyboard is fully slid out. A Samsung spokesperson told ZDNet Asia in an e-mail that the device will only reach the Singapore market at the end of the first quarter or in the early second quarter of this year.

In an e-mail interview with ZDNet Asia, Stephen Baker, vice president of industry analysis at The NPD Group, said hybrid mobile computers will be a niche product in the personal computer ecosystem as they are difficult to market effectively to mass consumers.

This is because while a hybrid computer does have its benefits, regular users are usually uncertain of the purpose of such two-in-one products, he explained.

Noting that such devices appeal mainly to power users and enthusiasts, Baker said "these markets are not big enough by themselves to impact either the PC or the tablet market".

According to Baker, another barrier to the widespread adoption of hybrid computers lies in the operating system. Most hybrids, he said, run dual operating systems--Microsoft Windows for the netbook style and Google Android in tablet mode. This makes it complex for the average consumer and again complicates the marketing of the products, he pointed out.

Chinese PC vendor Lenovo, however, begged to differ. Eugene Liew, country manager for Lenovo Singapore's home and small-medium business unit, told ZDNet Asia in an e-mail interview that many consumers are looking for a "great Android slate device" while some want a full PC.

A hybrid device, he said, will "offer the best of both worlds". The company's U1 Hybrid, first announced at last year's CES, uses Android in tablet mode and Windows 7 in laptop mode. Liew said users can use the lightweight tablet when on the move and the laptop for more heavy-duty tasks using Windows-based productivity tools, such as content creation.

The product has since matured from its development stage--Lenovo officially announced last week that it will be selling the device in China this quarter. The company, he added, has plans to offer similar tablets and the U1 outside of China later this year but does not have any other details to share for now.

Vendors to win market on pricing
Pricing can also dampen customers' desire for hybrid systems, Baker pointed out, explaining that such devices are usually more expensive compared to non-hybrid products. "When you can buy a tablet [or] a PC for less than [the cost of a] hybrid, most consumers would choose that versus buying the all-in-one," he said.

Gerard Tan, regional account director for IT and office at GfK Asia, concurred, noting that pricing will play a key role for such devices to win market share. In his e-mail interview with ZDNet Asia, he said consumers will be expecting price points of hybrid mobile systems to fall close to current netbook models.

U.S. PC maker Dell, for instance, has priced its hybrid computer, the Inspiron Duo, starting from US$599. The "affordable price point" for the device, which is available in the United States, is one of the reasons that will drive consumer purchase, noted a Dell spokesperson in an e-mail.

"Consumers today are consistently on the lookout for the best 'all-in-one' gadgets which are affordable at the same time, and we've priced the Duo in line with these expectations," she said.

Contrary to Baker's view that hybrids are for power users, Dell is targeting its device at families with children and Generation Y users.

On the other hand, the price of Lenovo's U1 Hybrid starts from about RMB 8,888 (US$1344.75), according to Liew. The tablet component, dubbed LePad, can be bought separately at RMB 3,499 (US$529.40).

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