Should Your Next Notebook Be a Netbook?

Despite the down economy this holiday season, netbooks are finding strong demand. The computers, which weigh less than most textbooks, are proving popular with high-school and college students. Consumers who might have balked at spending $800 or more for a full-featured laptop appear willing to pay half that for less features in a smaller package. Business people are buying the computers, not as primary work machines, but as personal machines or secondary machines for those times when sleeker is better.

Netbook computers, which Gartner refers to as “mini notebooks,” have already changed quite a bit in the year since they were first introduced. When netbooks hit the market last year with Asus’s release of the Eee PC, they typically had 7- to 8-inch screens. Despite the $300 price tag, consumers found the screens too small. And most shipped with the Linux, an operating system considered daunting by most consumers.

With this year’s release of netbooks with 9- to 10-inch screens and widespread availability of models running Windows XP, demand has taken off. The pint-sized portable computers dominate the top five slots on Amazon.com’s list of best-selling laptops, sporting prices of less than $400. In the three months ending September, sales of netbooks grew 160 percent, reaching 5.6 million, according to market tracker DisplaySearch. During the same quarter, Apple only sold 4.7 million iPhones.

But that does not mean that netbooks are ready to take over the enterprise, says Leslie Fiering, research vice president for mobile computing at Gartner. “They are coming in as companion notebooks, as second notebooks, that workers are buying themselves,” she says. “The question is whether they are ready to come in as a sanctioned corporate laptop—no.”

While the price is persuasive, the machines are not yet mature enough for the workplace, Fiering says. Most companies need Windows XP Professional or Windows Vista, not the Windows XP Home edition or Linux OS loaded on netbooks. At a typical 1024-by-600 pixels, the notebook screen resolution is still too low for many applications; surfing the Web, for example, frequently requires users to scroll their browsers side-to-side to view an entire page. And the netbook’s single-core processors—the most common one being Intel’s Atom—are not powerful enough to run many applications without noticeable delays.

“If you are a CIO who is trying to plan for the future, it is hard to commit to a platform like that,” said Roger Kay, president of technology-market researcher Endpoint Technologies Associates. “Most workers want a fully featured notebook, even if it is just for watching movies on the plane.”

More powerful netbook models will likely make their way to market in 2009 and 2010. And that’s another reason for businesses to wait, said Gartner’s Fiering.

“There is no system or platform stability,” Fiering says. “The models are going to churn very quickly, so it’s a little bit early to think about buying them for your workers.”

The current top dog of the netbook pack is Acer’s Aspire One, according to data from DisplaySearch. The top model on Amazon.com’s laptop list has a 1.6GHz Atom processor, 8.9-inch screen, 1GB of main memory, a 160GB hard drive and comes with Windows XP Home. The netbook, which weighs 2.2 pounds, sells for under $400.

Asus, which fell behind Acer in sales of its netbooks, sells a similarly configured netbook, the 904HA, for under $400. It also makes a larger version, the 1000HA, with a 10-inch screen. Both weigh slightly more than 3 pounds.

HP and Dell have also entered the market. HP’s sub-$400 notebook, its Mini 1010NR, has a 8.9-inch screen, 512KB of main memory, a 8GB solid-state drive, comes with Windows XP Home, and weighs 2.4 pounds. Dell has a nearly identical sub-$400 configuration, the Inspiron Mini 9, weighing 2.3 pounds.

One certainty: The evolution toward smaller devices will continue, says Fiering.

“It has been going on for the entire history of notebook computer,” she says. “I remember when the first sub-10-pound notebook came out, and I rushed out to buy it. The Holy Grail is to have something the size of a Blackberry that has all the functionality that you need.”