How long will it be until netbook launches get zero press coverage? The comments on a recent netbook story over at Engadget give plenty of hints. "Ahh i’m sick of all these mini laptops" says one commenter. "Please just make a weekly overview of the xxx rebadged notebooks that come out every day." says another.
How long before the profit margins on netbooks become so slim that there’s nowhere to go with pricing and all the devices become die-stamped copies? There’s at least five versions of the MSI Wind out there now and the latest one is by a light-bulb manufacturer! Will the next one use the Facebook brand as the differentiator?
How long before netbooks pass through the mass-market phase and enter laggard territory where they are pimped and given away free with a subscription to Readers Digest Online? How long before OEMs start to realise that most consumers are finding peace with netbooks, that even companies are buying them and that it’s possibly dangerous for their core laptop business? How long before the pricing war goes out of control and the quality suffers? How long before the money for R&D dries up and there’s no way out? It seems to me that there are issues for both OEMs and conumers ahead. [Article continues]
I’m not saying that netbooks are bad for consumers and I’m not saying that they wont be successful and sell tens of millions. Right now, things are looking bright for the consumer but I’m more than a little bit worried about the business model and risks for long-term quality issues that might come back and bite us. Here are some of the things rattling round my head as I write this article.
- Profit margins will get too low for high-street sales.
- Free netbooks from carriers will be easy to buy in 2009.
- The netbook will become the free toaster of the advertising industry.
- Some consumers are happy with netbooks as their only device
- Netbooks will cross over into laptop territory and will affect standard laptop pricing.
- ARM core netbooks are on the way.
- Smartphone netbook sleeves are going to appear.
- There’s limited room for increasing the processing power without damaging notebook sales.
- There’s limited room for improving specifications without damaging specialist device sales.
- It is becoming an increasingly boring and uninspiring market. (But that’s probably just the UMPC-loving geek in me saying that!)
It might look like a great time for consumers now but in two years time when we’re still getting run-of-the-mill devices with even cheaper components, cheaper batteries and cheaper engineering, we’ll wonder why we haven’t seen any OLED screens. Or next-gen batteries. Or high quality speakers. Or why the A, S and Enter key print has rubbed off or why the disk speed is still as slow as it was 5 years ago or why you’re still unable to edit videos on your laptop like you see in the adverts! It will be because the big notebook companies and carriers will have fought for customer numbers in the hope that they can lock people into their brand and get them to trade up every 18 months or buy a stack of accessories ir data plans. It will be because there will be no room on the accounting books for doing the R&D on new technologies. It will be be because we, as consumers, will simply buy the cheapest thing going without any regard for quality. In terms of consumer technology, nothing will move forward and we’ll be left doing tabletop computing with boring, possibly inefficient user interfaces, just like we always did. We’ll end up in a computing rut that me, and I guess many other mobile computing fans, would hate to see.
I guess its no different than cars and clothes and that it is inevitable. We shouldn’t be surprised as every product category tends towards 2, 1 or even zero % profit when it takes hold in a mass market. We’re all suckers for a ‘bargain’ and drive the process ourselves. In the end, if you want quality you have to pay for it but the problem is that it becomes a nightmare for consumers to find the wheat for the chaff. Does the ASUS N10 give you a better quality device that will last longer or is it an Eee PC 1000H with a few cheap extras bolted on? In the end, the customer is given the task of due-diligence and what might have been a fun process of choosing a new device becomes a nightmare of owners horror stories dragged up by Google. The whole buying process becomes a pain in the back-side. The R&D process slows down too so things like battery and screen tech take longer to filter through and become out of reach for even pro-sumers. Origami UMPCs may have been expensive but the thought, design, technology and even dreams behind them are what pushes solutions forward. Two failures and then a winner is, in my eyes, more desirable in the long-run than a safe-as-house marketing group that is happy to take technology a step back in time. You have to applaud Acer for having the courage to break away but I really hope they have an exit strategy.
The first casualties have already been seen in the netbook market. VIA are getting stomped on as Intel throw billions at pushing better cheaper chips out of the door. VIA has an answer but can this small company move quickly enough to respond? Even Intel’s own MID dreams appear to have been put on hold. Was Samsung’s empty booth at IDF a sign that resources got pushed from the MID project into the netbook project? The Linux ecosystem seems to be suffering too. There’s no time or money for people like Canonical, Linpus and Xandros to build slick operating systems because devices need to go from whiteboard to Engadget in 6 months and wins need to be made with the first wave of products. Its an opportunity that the Linux community may not be able to react to quickly enough. There have already been warning signs from Analysts and I’m sure there will be more.
As consumers, we’re in a good phase. Most of the products out there appear to be of reasonable quality and they are definitely serving a need. It could even be said that they are promoting the idea of low-impact computing and bringing the idea of mobility to the general public but I have this horrible feeling that the netbook pricing wars will progress and we’ll start to find out about hidden cuts after its too late. It will be silly things like changes in SSD specifications or touchpad manufacturers at first (yes, there’s evidence of that already!) but then we’ll start to see broken hinges, and failing components. There’s always the support line and the one-year warranty to fall back on but again, these will be full of holes. Is this the sort of mobile computing that we want the general public to be introduced to?
Is there a way that netbooks can progress without negatively affecting profits, R&D, design and innovation? Is there enough room for a reliable brand to rise up? Can Apple move into this market and stir it up? Will this all be over quickly and painlessly when someone introduces a smartphone that docks into a netbook sleeve and provides a true modular, mobile, in-the-cloud personal computing system or are there people out there that think the same as me and see a rocky road? Tell me what you think. In the long-term, are netbooks really a good thing?
Note: Despite my negativity, we will continue to cover netbooks on UMPCPortal. Don’t expect us to pick up news about every model that hits the streets as there are far better websites for that but if we see something special that might appeal to you ultra mobile computing fans, we’ll make sure it gets the attention it deserves. All the rest will go in the database so at least you’ll get a good overview and hopefully, with the details we have, the links to news and reviews, user comments and feedback from the various forums around the Internet, it won’t be too much of a difficult decision for you to make your purchase choice.