Laptops

Netbooks 2010: The Smartphone-Notebook Hybrid

A New Approach

Netbooks as they currently are being sold will continue to evolve, analysts and industry spokespeople agree.

"We'll have a big announcement about our future (netbook) processors in June," Intel's Al-Khaledy says. He refused to talk about the specific capabilities of those new processors, saying only, "in general, you can expect to see manufacturers deliver lower-cost, higher-performing netbooks."

In addition, Microsoft is positioning the lower-end Starter Edition of its forthcoming Windows 7 operating system to be appropriate for netbooks. A number of vendors, such as Hewlett-Packard, have said they will use that operating system.

On a separate track, though, a host of vendors -- including some big names such as Samsung, LG Electronics, Toshiba and Asustek -- are developing Snapdragon-based netbooks. Initially, Qualcomm said it expected these new devices to be available by the end of this year, and a small number of them should be.

However, Frankel acknowledges that most vendors won't have their new netbooks available as soon as originally had been thought. Vendors "are straining to get devices out by this Christmas, but that's pretty aggressive," Frankel says. "Whether it's Christmas or the first half of next year remains to be seen." He attributed the delays to the inevitable difficulties related to getting new types of products out the door.

The New Pricing Model

Another emerging change in netbooks is how they will be sold -- and how much they will cost.

While details are scant, vendors such as ARM predict the new ARM-based netbooks should retail for around $200. However, cellular operators also are likely to be selling new netbooks with built-in 3G modems at highly reduced prices -- if you agree to a two-year data plan commitment.

Communications vendors have long subsidized the price of cell phones and smartphones as a way of attracting customers. Now AT&T Wireless is experimenting with subsidized netbooks costing as little as $50, plus a $60 monthly data plan and a two-year contract, in its Philadelphia and Atlanta markets.

"We're very pleased with the results," Lurie said of the experiment, although he wouldn't provide any specifics about the test or AT&T's future netbook plans. Verizon is also reportedly looking seriously at subsidizing netbooks, including, according to some reports, Apple's alleged media pad.

Do These New Netbooks Have a Future?

Even though the first of these netbooks are still months away from release, they have drawn their share of doubters.

"I'm very skeptical," says Stephen Baker, vice president of industry analysis for market analysis firm NPD Group. "It's not a traditional product and it requires users to do things they're not used to doing. It doesn't run Windows. How is it going to play with people's home network, plugging in USB drives, printers and the like?" He predicted these new netbooks will be relegated to small market niches.

Current Analysis' Avi Greengart is also skeptical of the new approach to netbooks. "They're trying to promote something between a cell phone and a computer," he says. "I understand the use-case for computers and cell phones, but I don't understand the use-case for something in the middle."

However, proponents of the new devices scoff at the skeptics. "It feels like the smartphone space a couple of years ago," says AT&T's Lurie. "Then, smartphones were mostly for business folks. Now they're for everybody. Netbooks are in that same infancy."

David Haskin is a freelance writer specializing in mobile and wireless issues.

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