Communications of the ACM

As recently as a year ago, the hype was still behind netbooks.  The Washington Post breathlessly declared netbooks to be the "bright spot for this industry" and that "sales are expected to be strong again in 2010."

 

Now, only a year later, The New York Times reports that sales of netbooks have stalled.  What happened?

 

Netbooks are cheap, underpowered devices with a small screen and cramped keyboard. As such, netbooks have always existed in a niche that was about to close.

 

There appear to be two types of device people want.  One is a small, portable, pocketable device that can be used for light use, mostly entertainment and quick communication.  The other is a device for work focused on enhancing productivity, a device that is easy to type on and easy to read.

 

The reason these two devices cannot be merged is the input/output problem.  There is no easy way to build a small portable device that is easy to type on and easy to read.  The screen is just too small, the keypads cramped.  There are clever innovations -- virtual keyboards projected on to surfaces ([1]), using the back of the smartphone to expand the input surface (e.g. [2] [3]), retinal displays that create massive screens floating in front of you by drawing with a laser directly on the back of your eye ([4]), and speech input/output (e.g. [5]) -- but these are not mainstream nor likely to become so any time soon.  For now, we need two devices.

 

Netbooks live in an uncomfortable niche.  With their small screens and cramped keyboards, typing on the device is hard and reading on them is unpleasant, and they remain too large to fit in a pocket.  They are also badly underpowered, closer to a smartphone in computing power than a laptop.  Their main appeal has always been that they were cheap.

 

Now, smartphones are about the same price as a netbook, and small, light, long battery life laptops are available for $600 or less.  The netbook niche is gone.  The main appeal of the awkward compromise of netbooks was the price, and that advantage has now mostly closed.  The niche has vanished almost as soon as it was created.

 

Rather than mourn the loss of netbooks, we should celebrate what lead to their demise.  An iPhone is an amazing device, about equivalent in computing power to the Power Mac G4 of only ten years ago, sitting in the palm of our hands.  Small, light, and long battery life laptops used to cost more than $2000; now they are available for $600.  The end of netbooks is from the strength of smartphones and laptops.  That the niche closed is only a good thing for all of us.

 

If you liked this article, you might also enjoy one of my previous blog@CACM posts, "How Many Computers Will You Own?"

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Antonio Piccolboni

February 16, 2011 06:36

The "niche" between laptops and smartphones has never been better. It's only the keyboard that didn't make it and the moniker is now "tablet".

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Greg Linden

February 17, 2011 12:01

Hi, Antonio. Could you elaborate on that? The core problems with these devices are that they are too large for a pocket, too small to solve the input/output problem, and no longer cheap enough to attract people to the niche in spite of those flaws. How does dropping the netbook's keyboard to turn it into a tablet do anything more than make the device somewhat thinner and somewhat more awkward to type on?

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Antonio Piccolboni

February 18, 2011 06:36

Hi Greg, if you are correct, how do you explain the iPad and the Tab flying off the shelves (resp. 13 and 2 millions last year)? I think you are confusing your very legitimate but individual preferences with a universal law. The smartphone-laptop-intermediate device is the great success story of 2010 in consumer electronics and a new form factor in computing devices. The netbook was the first attempt in that segment and the tablet is the current champion. On an unrelated note, please send any underpowered, unreadable, expensive, keyboardless and unpocketable iPads you need to get rid of to the following address ...

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Anonymous

February 19, 2011 03:40

I just got a netbook (maybe it's considered a "mini-laptop", 8.9" Acer Aspire One) -- second hand, $100. Best $100 bucks I've spent in a long time. Turned off all the media for my phone -- I have no problem typing on a keyboard that is 93% the size of a standard, but texting my way through even the simplest email was asinine. Reading on the little screen was even sillier. I looked at tablets -- several of my students have them instead of laptops. The screen wasn't that much bigger, though it is certainly prettier. Once the tappable keyboard was up, though, what advantage it had for serious work disappeared. I got the Kindle app so can read on the netbook as well. And I don't have to pay Verizon a monthly fee for using their network when most everywhere I want to be is wireless and free. I disagree that there is no niche for little laptops/netbooks. It is, and should be, a personal decision based on what tech combination works best for the individual.

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Greg Linden

February 22, 2011 10:53

Hi, Antonio. I explain the current iPad sales and growth the same way I explain the early tablet sales and growth, sales mostly to early adopters that we can expect to stall.

As the graph in the New York Times article linked to in the article shows, the issue is that netbook sales have stalled. Sales of netbooks are still 34M/year, but are no longer growing and may be about to decline. Tablets are in that same graph at 15M/year but appear to be 2-3 years later in the sales cycle.

So, the main question to ask is whether tablets will continue growing where netbooks failed or will show the same sales trend as netbooks and peak soon at around 40-50M/year units sold. If you think they will keep growing, you need evidence that they have mainstream appeal, and I am arguing that they do not (see, for example, the Wired article at http://goo.gl/IS4XH, which, despite the inflammatory title, points to a survey showing that iPad owners are mostly wealthy early adopters).

I am not claiming that no one will buy these devices. I am claiming that the niche is small and closing, so the exponential sales growth we saw in netbooks and currently see in tablets will slow, stall, and then go into decline.

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Antonio Piccolboni

February 24, 2011 10:39

Hi Greg,
I respect somebody who can stick out his neck a make a bold prediction like the demise or limited success of the tablet. Also putting numbers on what you mean by "niche" was very useful. My prediction is that some tablet-reader hybrid will replace the book, and is here to stay. Computing history will tell if your prediction was accurate.

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Greg Linden

February 24, 2011 11:19

Great point, Antonio, on eBooks. That may be a different market though, a specialized computing device intended for high performance on one task. The Kindle, for example, is not a general computing device, but an eInk device with a low reflective screen optimized for reading.

I agree that, eventually, some sort of tablet reading device will have mainstream appeal as a replacement for books and pads of paper. But eventually is a long time. As I saw it, the question posted in this thread is about the short-term potential of the netbook (and, then, in the comments, the tablet), whether it will see exponential growth, and whether it will take over a large chunk of the computing market in the next 5-10 years.

So, looking out to the next few years, I suspect we're more likely to see the iPad and Android tablets stall than continue rapid growth. The reasons for that prediction are that the devices haven't attracted mainstream sales (most sales are to wealthy early adopters) and don't solve a mainstream problem (too big to be pocketable, too small and awkward to compete with a laptop for general work).

Thanks, Antonio, this has been a great discussion. It's a very worthwhile debate with good points on both sides. I think our comment thread added much to the article, thanks again.

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Anonymous

July 08, 2011 05:40

For those of us with old eyes, netbooks had a larger screen that smart phones can't.

http://goarticles.com/article/Good-Reasons-To-Buy-Cheap-Netbooks-Under-100/4778444/