Fast Forward: Fretting over Netbooks


The recession is getting so bad that stock market refugees are snapping up Treasury bills at 0.2 percent interest, and car dealers have tried everything but adding immortality to their option packages. So you would think that a hot-selling product would be universally welcomed.

Netbook computers are a rare bright spot in a dimming economy. They’re selling faster than copies of Foreclosure for Dummies. The Asus Eee PC opened the door. Now there are too many to count.

However, critics say netbooks might be a bad thing. Their reasoning is that most netbooks use Intel’s Atom processor, which costs less and has lower profit margins than Intel’s other mobile processors. Atom’s popularity, they say, might actually hurt Intel and drag down profits for system vendors and their suppliers.

Enough of that. Netbooks are a good thing. In the first place, market surveys indicate that netbooks aren’t displacing notebooks. Most buyers either have a notebook already and want something more portable, or they weren’t considering the purchase of a mobile computer at all until netbooks came along.

Of course, the surveys could be wrong or premature. I’m sure some people are bypassing traditional notebooks for smaller, lighter netbooks. But the choice isn’t easy, because most netbooks aren’t much cheaper than full-featured notebooks with superior screens. Intel, genetically paranoid, is carefully positioning netbooks as less-capable machines suitable for casual email, web browsing, and social networking. When Nvidia recently tried to expand the scope of netbooks into gaming by introducing a chipset with better graphics, Intel responded with aggressive countermarketing. Intel is also trying to limit the screen sizes of netbooks.

It’s inevitable that netbooks will cannibalize sales of larger computers to some degree. Computing is going mobile, a trend no one can stop and that wise companies will exploit. Intel is promoting a “new” class of mobile Internet devices (MIDs)—basically, PDAs reborn. Intel is also pushing Atom into smartphones.

The success of netbooks, Apple’s iPhone, and wireless networking show that people want the Internet wherever they go. If larger notebooks can’t make the grade, too bad. Resistance is futile.

Tom Halfhill was formerly a senior editor for Byte magazine and is now an analyst for Microprocessor Report .

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