Dave Michels On The Demise Of Netbooks

Self-proclaimed telecom Blogalyst and all-around great guy Dave Michels recently posted some interesting observations about Microsoft, the sorry state of the PC industry and the demise of the netbook category. As someone who has counted a couple of netbooks as important tools in my arsenal I’ve been pondering his assertions. While I agree with many of his observations, I’m not so certain that I draw the same conclusions. Netbooks were doomed to be transitional items from the start.

Dave is correct that Microsoft took a dim view of netbooks, offering only Windows XP Home at a price point that would permit them to retail in the $200-300 range, at least initially. Recall that the entire category was started by the Asus Eee PC. That device offered a 7.0” display, Intel Celeron CPU,  512 MB of memory and 8 GB of flash storage and sold for $199. That device tapped Linux to keep the price down and the performance acceptable.

One of the innovative aspects of the early netbooks was the use of flash-based storage. This was before SSDs were commonplace. It was a great way to eek some performance from otherwise pokey hardware.

The category evolved quite quickly, with most netbooks offering traditional hard drives for storage and displays in the 9-10” range. Most were based upon Intel’s Atom CPU family. At their peak they sold in the range of $350-500.  Only the occasional model reached beyond those prices.

Where Microsoft really struck a blow was limiting the netbook edition of Windows XP Home to use only 1 GB of memory. My first netbook, the HP Mini 2140, was hobbled in this manner.

It’s other serious limitation was the display resolution. For a long time netbooks only managed displays running at 1024 x 600 pixels. Quite frankly, that’s too limited in the vertical axis, even for common web browsing.

The 10” netbook form factor was compelling for certain use cases, and there were a few models aimed to business use. My second netbook, a HP Mini5102 was one of those models. It was ideal for the frequent flier. It was small enough to be useful in a coach class airplane seat and the extended-life battery lasted a full five hours.

However, to make that model truly useful carried considerable cost. It had 2 GB of memory, ran Windows 7 Pro and had a 1376 x 768 pixel “HD” display. These features made it much more useful, but ran the price up over $700. Slightly lesser variants were offered around $400. At those prices over time it was eventually competing with more capable low-end laptops. Only its minute form factor giving it unique appeal.

Dave suggests that there were netbooks with displays in the 12-15” range. In my view these are not netbooks at all. Netbooks were generally considered to have 7-10” displays, maybe 11” if you’re feeling generous. Anything bigger is really laptop. Anything with a full-sized keyboard is definitely a laptop.

Therein lie the rub. Netbooks were inherently limited from the start. The Atom CPU was just too slow. The displays were too small. The keyboards were cramped. They were in fact an exercise in deliberately limited systems. They were to be cheap and small above all else.

All the while new competitors encroached upon their turf. Laptops kept getting more capable and cheaper. A 12” laptop is better than any netbook in most ways. These days $350-400 buys a decent consumer laptop, without all of the compromises that were the hallmark of the netbook class.

And then came the upstart tablets, initially lead by the iPad, later joined by various Android devices. While more suited to media consumption that creative chores, tablets found wide acceptance even though they often cost more than a netbook. Their new form factor trumped even the wee netbooks.

Ultimately, netbooks were simply outclassed by tablets and low-end laptops. A change in OS was not going to extend the life of the category in any appreciable way.  The very small form factor was only compelling to niche users.  The window of opportunity for the netbook was small, and now it’s simply gone.