Are Netbooks Just a Fad?

Can the best-selling category of the PC market really be just a fad? A junky joke? A stunt to prop up the PC market created by Intel (INTC)?

Jason Hiner at TechRepublic seems to think so. He proclaims:

Netbooks — those underpowered mini laptops with 7-inch screens and unusable little keyboards — are a dying fad. However, the legacy of the netbook will be that inexpensive notebook computers are here to stay, and they are lighter and thinner than ever.

Analysts and pundits will continue to use the term “netbook” but I’m going to argue that the device that we originally called the netbook is being phased out — and thankfully so.

I have a netbook. It’s small—9 inches—and it now belongs to my daughter. My hands are too big. The screen is too cramped. And I’m inclined to think that Jason’s right. The netbook is just a passing fancy.

And then I follow the numbers. Look at all the people buying netbooks. NPD’s DisplaySearch reckons that netbook sales surged 264 percent in the second quarter from a year ago. Revenue for the overall notebook market declined. Here’s the scorecard.

Meanwhile, check out Jason’s talkbacks. It’s a love affair—and they all couldn’t be sent by the netbook fan club.

The special thing about it that makes me happy is that it’s small and so handy. I don’t need to play games or do lots of complicated things on the street. But this one is just 100% what I need and I will never give it up.

And.

I bought a Dell Mini 9 in 2008 and have never regretted it. It’s small enough to carry in my purse, boots up quick, and maybe it’s because I have small fingers, but the size of the keyboard has never been an issue.

That said, it is not my main PC, nor would I ever try to make it such. I bought it to browse the internet and do some light word processing - the heaviest lifting I have ever asked it to do is stream movies across my wireless home network - and it has always performed flawlessly.

And.

I bought mine due to travel restrictions imposed by the airlines on a trip to Australia in 2008 and love it. I use a regular laptop/notebook as my main computer at home but it is too big and heavy to travel with. The Netbook allows me to use almost all my programs, some engineering, spreadsheets, topographic maps and GPS routings. I even use it at home with my wireless network, sometimes in bed at night while reading books on exploring Utah so I can see the topographic maps and the satellite pictures of the area. No it doesn’t replace the desktop notebook but darn near.

Are these people bonkers? Nope. Intel’s financial results—partially fueled by the Atom chip that powers these little devices—tell the tale.

Netbooks aren’t for me, but apparently there are a ton of allegedly confused consumers still buying them. Dell (DELL) and Microsoft (MSFT) have downplayed the netbook to some degree, but what else are they going to do? After all, the netbook is a margin killer.

So what’s the future of the netbook? It’s way too predictable to envision lightweight notebooks replacing the netbooks. Netbook 2.0, 3.0 and 4.0 are likely to have different form factors. Perhaps the Droid and the iPhone are really your netbooks. Perhaps Apple redefines the netbook category with a tablet. Perhaps people keep buying the current versions of netbooks. Netbooks will hang around and probably thrive because people like second and third computing devices. The form factor may change, but the market niche isn’t going anywhere.

Comments

[William Leg...:]

Netbook v1 with 7-9" screens and tiny keyboards are already deceased. Netbook v2 with 10-11" LCD-backlit screens and 95% keyboards are here to stay. Don't think so? The average American consumer can afford less and less. Traditional laptops and bulky desktops suddenly seem extravagantly expensive compared to a $300 netbook for the average user who browses the internet, uses email, and occasionally creates a document or two. Netbook v2 is seen as "good enough", especially since it's way easier to lug around than the typical 5-8lb laptop.

Nov 16 03:54 PM

[Pammie:]

I bought an Acer Netbook, because I could not resist:
*the low price
*the OS (XP when everything else had crappy Vista)
*the small, but not too small, size (ie, I tried Palms, too wimpy & small, same with BBs)*the surprising quality for the price
It's a convenient little PC you can take anywhere with you. It can perch on your dashboard, fit easily in any tote bag or backpack, fit on a small plant stand or table, & if you are one of those babies who complains about keyboard size (*wah-wah*), there are many usb ports built into most netbooks I've seen to accommodate everything including a *gasp* wireless keyboard & mouse. Problem solved... For the price, netbooks are portable, useful bargains affordable for just about everyone. For Geekettes, they are a dream come true. Who said diamonds are a girl's best friend?

Nov 16 07:59 PM

[robert99:]

No, they are not a fad.

Nov 16 08:34 PM

[sink:]

I have a netbook and a desktop, my partner has a netbook and a kick ass laptop with 17" screen. The desktop and laptop are for serious work, the netbook is portable enough and go every where we go (last 6 hr per charge with wifi on, not watching video).

Nov 16 11:02 PM

[tech_analys...:]

No Netbooks are not a fad. The small devices are here to stay. However, it is unlikely that netbooks continue to experience the same exponential growth rates in 2010 and beyond. Just a couple of points as to why I say so --

Point 1 -- Netbooks were successful mainly due to their low price points. Consumers were willing to sacrifice performance for price due to the poor state of the economy. So, it is very much likely that as the economy improves, consumers will no longer want to make that compromise and may switch back to value notebooks.

Point 2 -- Cost of Components -- OEMs were able to manufacture the low cost devices during the recession given that cost of components were at their all time low. However, component prices will surely rise as PC demand again picks once the economy improves.

Nov 17 09:17 AM

[RogerScott:]

If I am going to buy a device to access the internet while traveling I have a choice of buying an expensive cell phone for $100/month, e.g. Blackberry or a netbook. I suspect the netbook is much cheaper. I also suspect the skeptics of the netbook have a Blackberry and not even imagined going w/o one.

Nov 17 12:53 PM

[Tom B:]

Yes, they are a fad. If you REALLY want ultra portable and cheap, get an iPhone. You can put those right in your pocket. And they are no-compromise, solid hardware; not junk.

Nov 17 10:03 PM

[Nettligent:]

Netbooks are Just a Fad. Laptops are cheap, powerful, and versatile. iPhone is a perfect compliment. Period.
If Apple drops price on iPhones, netbooks will disappear.

Nov 20 11:40 PM