Netbooks: mobile social computing laptop killers

maggiefox, January 10 2009

It’s January 10th and high time I made some prognostications about some of the things to come in 2009. I’m going to sum up something that has been on my mind this week in one sentence that has very broad implications: netbooks are going to destroy the traditional laptop market.

For those of you unfamiliar with netbooks, they are:

Light-weight, low-cost, energy-efficient, highly portable laptops that achieve these parameters by offering fewer features, less processing power and reduced ability to run resource-intensive operating systems (e.g., Windows Vista).

Typically retailing for between $300 and $700 (about the cost of a decent mobile or smart phone), they are cheap, they are portable and with an estimated $10.5 billion dollar in surplus inventory within the semi-conductor market (the companies that make the chips that make them go) caused by declining computer sales as global customers hunker down and save their pennies/put off upgrades, market conditions will likely make them cheaper still.

Not convinced? How about introducing telcos to the mix? Most netbooks come equipped with wifi and/or EVDO cards. Given the price point on the hardware, it is conceivable that consumers could eventually be offered a free netbook in exchange for signing up for a multi-year mobile broadband plan (at the moment AT&T is offering a $99 Acer in exchange for signing up, but just wait until there’s some competition). The similarity to cellphones and cellphone marketing strategy is quite striking.

Sales numbers bear out the potential for a dramatic upward trajectory in netbook penetration. In 2007, about 182,000 netbooks were sold. 2008 sales were estimated to hit 11 million units. Companies like Asus and Acer estimate that about 10% cannibalized the traditional laptop market. That, of course was before the perfect storm of a brutal economy, decreasing costs and telcos jumping on the bandwagon.

Why am I blogging about computer technology and market conditions? Because cheap, broadly distributed, Internet-enabled netbooks will profoundly change mobile/social computing. When almost anyone, anywhere can pull a fully enabled (but just a little bit smaller) portable computer out of their bag or purse and connect with friends, family and content on the Internet, anywhere and anytime via the magic of mobile broadband, the tools that enable that sociability (collectively known as “social media”) will change dramatically in both use and importance (I’m not even going to get into the potential impact for cloud computing).

The big question is, are you ready?

Discussion

Parker on January 10th, 2009
One of the major predictions for the future of social technology/websites that I keep hearing is the rise of mobile computing. I think that too many people are taking this to mean that people will be browsing their internet on their mobile phones, and that developers should be working to create applications or websites with mobile phones in mind. However, I think that what people haven't planned for is the rise of the netbook, as you predict here. Websites don't need to be mobile friendly - instead, devices are becoming more portable. Last year, I got a Mac book for christmas and was amazed at how small, portable and powerful it was compared to the laptop I had previously. A year later, and it already looks clunky and feels overly heavy compared to what is coming out.
J.J. Toothman on January 10th, 2009
I'm with you on this prediction, Maggie. Which is partially why Apple's tuesday keynote totally befuddled me. With netbooks trending upward and the current economic climate, they come out with a $2799 macbook. As I (snarkily) blogged yesterday, I could buy 5 Acer netbooks for that price.
Andreas Duess on January 10th, 2009
The $2799 Macbook is a totally different tool to a netbook - the comparison doesn't hold water. What netbooks are cannibalizing are not the high end laptops for those of us who need the horsepower, they are cutting into the low end laptop market.
Maggie Fox on January 10th, 2009
@Andreas, true that the Macbook is not a comparison, but I think the point was that Apple is not even dipping a toe into this emerging market, which is a little surprising (and perhaps a decision that may come to haunt them). As far as computing horsepower goes, I think that's just it - most portable home computers don't actually need more than Internet browsing, word processing and perhaps a spreadsheet for basic budgets. Throw cloud computing into the mix, and you can even cross the last two things off the list. I would argue that the "low end" laptop market is emerging and potentially far larger than any other segment.
Thomas on January 11th, 2009
Maggie, Agreed. I have a Lenovo T61 from my employer, but I'm thinking of getting a netbook simply for the weight saving and better UMTS integration. I will then just leave the T61 in the docking station. Next debate for me is Ubuntu or XP. I like the idea of learning something new, but I sense also I'll need to work harder if I want it to be compatible with my windows work machine. What are you mac types doing? XP or Linux?
Michelle Evans on January 12th, 2009
I agree that the future of the web is mobile, but I'm still not sure how. I think it will be a combination of devices and I am still certain that mobile devices will play a big part. Netbooks are still bigger than many purses ;) Besides, how sites will be displayed now that there is a shift back towards smaller screens (does anyone still design for 800x600?) that will have to be taken into account, so design may take on even more challenges than they're facing right now with the array of devices used. I was just saying yesterday that I want to get a netbook asap. No point hauling a 17" laptop around anymore.
Nicole DeRuiter on January 12th, 2009
While I think that netbooks offer great opportunity (especially in the US where people seem more reluctant to give up computer-based networking), I'm still a bit slower to adopt the mindset that this will be a huge trend. In the rest of the world, mobile phones provide the primary base for frequent web access/social networking and I imagine that with more global networking, the US will continue to move more in the direction of 'smart phones'.
Wayne MacPhail on January 12th, 2009
I have a netbook and a MacBook Pro (and just ordered a new one). I'm finding I use the netbook much less than I would have imagined. Yes, it's small, has great battery life and is light. But it doesn't run OS X, so it doesn't run Keynote and that's my go-to presentation tool for classes and clients. I agree that netbooks don't replace anything but lower-end laptops. If I were a Windows user, or if there were an OS X -based netbook, maybe I'd feel different. As for Linux vs. XP. Avoid Linux. It's a bag of hurt if you try to do or install anything beyond what is baked into the netbook. Had Linux on mine and returned it for the XP version within a day.
Rick on January 12th, 2009
Netbooks are a great opportunity for providers of EVDO internet access to develop their market (i.e. make a ton of money). Something I'd consider when choosing the OS on a netbook is security. While traveling between a lot of wi-fi hotspots and unsecured networks, the computer will be exposed to some threats. Linux/Unix is reputed to be the most secure OS available. I think that most netbook makers have tweaked the included Linux GUI so that all your web apps are easy to access, use and update. Even if you're new to Linux, you'll probably be productive right out of the box.
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