06:15 AM

Reports of Netbook's Death Greatly Exaggerated...

With all the excitement around the iPad and predictions of dire impacts to the netbook market and perhaps even laptop sales, we got to wondering: Is the netbook really dead?

Nifty, low-cost netbooks hit the scene in late 2008 and sold over 36 million units in 2009, according to ABI Research. Even with projected sales of 35-43 million units this year, the future of these diminutive laptop-like computers is being pulled under a dark cloud of doubt as new tablets grab the limelight and spare cash from consumers.

Collection of new netbook designs on display at the Intel Developer Forum in San Francisco in September 2010.

"The all-in-one nature of media tablets will result in the cannibalization of other consumer electronics devices such as e-readers, gaming devices and media players," said Carolina Milanesi, research vice president at Gartner. "Mini notebooks will suffer from the strongest cannibalization threat as media tablet average selling prices (ASPs) drop below $300 over the next 2 years."

Not so fast, say people who are looking at the robust sales of netbooks, which were one of the fastest-ramping consumer devices in the PC world and are still selling tens of millions of units per quarter.

"Early adoption of media tablets is not outpacing netbooks," said ABI Research principal analyst Jeff Orr. "Forty-three million netbook shipments is good growth, just not the meteoric pace of the past couple of years."

By Intel Free Press

While some believe the category or netbook name may dissolve into something called an ultraportable laptop, there's keen interest in innovations aimed at keeping netbook sales robust well through 2011, including new, thinner designs, faster dual core processors, less expensive solid state drives, multi-touch and instant-on.

"I'm looking forward to a very exciting 2011," said Sacha Pallenberg of Netbooknews.com, speaking on a panel at the AppUp Elements event for software developers in San Francisco in September.

Pallenberg gets excited about the vigorous competition among chipmakers and netbook designers that he believes will bring better performance, longer battery life and new applications fit for these small companion devices.

"Intel estimates there will be hundreds of millions of netbooks based on Intel Atom processors in market over the next few years," said Intel's Anil Nanduri, whose team created the world's thinnest netbook prototype first shown at Computex in June.

The worlds thinnest netbook prototype codenamed Canoe Lake, developed by Intel with Intel Atom dual core processor inside, first shown at the Computex event in Taipei in June 2010.

"Even though it looks like the growth rate of netbooks is flattening out, they are still at a very, very high level," said Pallenberg. "Netbooks have a market share of about 20 percent or more of the whole computing market right now. I'm pretty confident that this is going to happen again next year because right now many first-time netbook users will move over to the dual-core powered netbooks, which will generate sales and excitement in the development community."

Netbooks are considered laptop or desktop companion device best used for surfing the Internet and enjoying digital media while moving around inside or outside a home or office.

"When you see a netbook, you see a computer," said Hubert Nguyen, cofounder of consumer technology blog Ubergizmo. "You expect it to react like a bigger computer, but people will be making trade-offs for having a smaller size, like getting less performance. Tablets will bring a new usage model with instant-on and they will be used for things you can do very quickly, whereas the netbook is an extension of the PC."

"A netbook is easy to get; it's just another computer." said Juuso Huttunen, a netbook hacker and video blogger at jkkmobile. Tablets are different. You need to figure out where they fit in. I don't use tablets for work, only for reading or watching something."

In an interview with CNET, IDC researcher Bob O'Donnell said he sees some similarities between the netbook craze and today's tablet excitement.

"Two years ago, netbooks were going to kill the notebook market. Now, a few years later, we can look back and say 'no, not really'," O'Donnell said. "A similar phenomenon happens with tablets. People may short-term delay the purchase, but when they need to get a new notebook, they're still going to get a notebook. In other words, they're going to use both of these things simultaneously."

"I think what people want most is more battery life and instant-on operating system," says Nguyen.

Although hackers such as Huttunen are exploring ways to tweak their netbooks to power on instantly, a fast boot up is one of many things most netbooks don't deliver today.

In his research about netbook usage around the world, O'Donnell discovered that that the lack of software features and services for syncing netbooks with other computers could be keeping netbooks from being a truly trusted companion.

Putting more emphasis on "companion" has been a focus spot for developers creating netbook-specific applications.

"It's not just netbook-specific apps that have made the mobile computing space interesting, it's the secondary mobile computing PC space that have made apps and the mobile computing space more interesting," Nicole Scott of Netbooknews wrote in a email interview with Intel Free Press.

It's about "apps that realize netbooks, smartphones and tablets are secondary devices to your home or work PC," Scott pointed out. "These next-generation apps allow you to transfer your data between devices, whether that data sit where you are on in 'Angry Birds' or information about your current work obsession."

Netbooks have succeeded so well that they have become irrelevant, according to Avram Piltch of Laptop Magazine. In his September story "The Netbook Revolution is Over, So What Did You Win?" he concludes:

"Dual-core processors are just the latest in a long line of improvements to the netbook that make it nothing more than a 10 or 11-inch ultraportable laptop, a far cry from its radical beginnings as a secondary Web-focused device. How long until vendors give up the ghost, stop calling them netbooks, and begin to market them as 10-inch notebooks? Tiny as they are, many people use them for Microsoft Office, photo editing, or even playing 'World of Warcraft' at a low resolution."