Saturday, June 18, 2011

The unwanted netbook soldiers on

 The netbook may be about to disappear, but it is amazing what changes this product brought to the laptop market. Three years ago, a 10.1-inch Atom powered netbook would cost you Php25-30K. When the first netbooks came out, finding an ultraportable under 30K was amazing. A 12.1-inch ultraportables back than would cost you more that three times as much.  The netbook provided a cheaper alternative to those wanting a 3-pound laptop but not willing to pay the premium price.
By 2009, the price of a netbook went down to 20-22K. But the notebook changed enough to make updating your one year old model worthwhile. Intel did not give you a good reason to upgrade your netbook, but netbook manufacturers package larger batteries with their 2009 models. While most netbooks in 2008 came with 3-cell batteries, most 2009 models came with 6-cell batteries makign all day  computing commonplace. 

In 2010, netbook pricing remained pretty much stagnant, and technology remained pretty much stagnant. Dual Core Atom's did not provide a significant performance boost giving you little reason to upgrade. At the same time, Apple changed the mobile scene with the tablet and ultraportables powered by Intel's Core i3 became available at about 30K closing the price gap with netbook while providing performance levels way beyond what any netbook could could produce.

Intel let netbook technology remain stagnant, as if it were a platform they wanted to kill. The truth of the matter is they did. Profit margins on netbooks are small, but in the wake of poor economic conditions, selling these cheap boxes kept sales up in a weak market. Netbooks were a temporary placeholder to be phased out, when the market grew tired of their sluggish performance and when the economy improved enough to allow buyers to spend more for a more powerful laptop.
By this time, Intel was probably itself hoping the netbook was dead with the market flocking to higher priced laptops. What Intel did not foresee was that the tablet would come around, and the cheap netbook platform would not be phased out by more expensive laptops, but by low priced tablets.

With the advent of the tablet, the netbook has been forced to soldier on, and to meet the tablet onslaught, what would have cost you 20-22K in 2009 and 2010, would cost you about 11K to 15K today, priced just under the tablet price point. Without a viable tablet contender, Intel has been forced to have the netbook soldier on and drop its price. The netbook is a placeholder once again.

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