Years ago, Linux vendors and Pacific Rim hardware maker outsiders made their last ditch effort to revive their flagging fortunes in the PC world and invented a new, super-low-end type of PC called the netbook. Early netbooks were marked—marred, really—by similar low-end specs, including wheezing, low-end CPUs, tiny amounts of flash storage, tiny, barely-usable keyboards, and the inclusion of Linux rather than Windows. Each of these components helped keep costs down and despite the fact that the earliest netbooks were almost unusable, they began selling. So Microsoft swooped in, first with a low-cost version of Windows XP, and then later with Windows 7 Starter. Working with Intel, it crafted higher-end netbook specs that included still-lousy Atom processors, traditional hard drives, and a selection of ports that was more in keeping with traditional Windows laptops.
The results were almost immediate. Netbook sales exploded, Microsoft kicked Linux off the PC for good, and Intel saw a sharp increase in component sales in a market in which it had previously been excluded. Netbooks also branched up and out, with larger models that featured bigger screens, usable, full-sized keyboards, and, eventually, even decent processing power. In fact, netbooks were so successful that they blurred the line between themselves and low-end, traditional laptops. The only thing that remained consistent was that netbooks were, as always, inexpensive.
To industry insiders, netbooks were just the latest example of the Microsoft/Intel duopoly called "Wintel" subsuming a market for their own needs. Remember, the original point of the netbook was to remove these two companies from the equation and make room for other players. But by adopting this market for their own, Microsoft and Intel proved, once again, that it was they, and not any unwanted outsiders, that set the PC agenda.
Game, set, match, right? Not exactly.
Less than two years ago, Apple launched its iPad as a new type of computing device. Physically, the iPad was (still is) just an iPod touch with a 10-inch screen and a very slightly modified user interface. But what a difference that 10 inches of screen makes. What consumers discovered was that most of their computing needs could, in fact, be met by this device, and that the benefits of a true laptop—or netbook—were outweighed by the iPad's size, weight, and convenience, and by the simple joys of its multi-touch interfaces.
With iPads selling for an average of $650, or roughly twice the price of a typical netbook, it would seem that the low-end PCs that could would be in no danger. Besides, many iPad users are simply supplementing their PC usage with the device, so these sales are largely additive, and not cutting into PC sales.
Or maybe not. In its most recent quarterly financial announcement, Intel noted stronger-than-expect PC-based revenues, and in all but one market, the company had outperformed even the most positive of outlooks. But that one net negative market, of course, was the market for netbooks. Customers, it seems, have finally began abandoning the netbook market in droves, and while we might debate where they're going—slightly more expensive laptops that offer dramatically better performance, iPads and other tablets, or some combination of the two—there's no denying that netbooks are now on the downward side of the growth curve. As suddenly as they came and shook things up, netbooks have just as quickly fallen by the wayside.
Intel has an idea for a replacement.
