Who killed the netbook?

The netbook’s brief success was also its swan song

The netbook has been murdered. The concept of an inexpensive computing device with high value for the third world has been sufficiently co-opted so as to make the category meaningless. Some called netbooks a sub-category of "ultra-light" or "sub-notebooks", but netbooks became legitimized by the announcement of the $100 OLPC laptop.

Lots of people wanted to see the original concept of a $100 laptop work. However, hardware and operating systems vendors saw no financial opportunity in that concept. Therefore, netbooks died the death of a thousand cuts, and netbooks as a conceptual computing category have been nearly wiped out. The netbook made the industry take a serious look at value. What has transpired reflects that. We have more lightweight computing platform choices than ever before. The netbook's brief success was also its swan song.

For a seeming few brief moments, netbooks caused the tech industry to quake: astoundingly inexpensive alternatives to comparatively bloated and expensive personal systems —laptops, desktops and notebooks— that could be affordable even and especially in the third world.

Value upended

The sub-notebook category had a number of expensive members in 2005. There was Sony's PCG-1CX, which in 2000, featured 64K of memory, Windows 98, and a 16x9 aspect ratio screen with a whopping 4GB disk drive. Linus Torvalds, inventor of the Linux kernels used one. Toshiba had its Librettos, and the Psion had a comparatively tiny form factor. At some point, these ultra-lights had a built-in Ethernet connection, and became netbooks.

The redefinition of the netbook was the progeny of the MIT Media Lab's Nicolas Negroponte. Negroponte, along with the UN's Kofi Anan, announced a system to be called the One Laptop Per Child, or OLPC in late 2005. Their goal was simple: a $100 highly functional laptop—computing affordable by all. The specifications were designed to help bring computing to the third world, where $100 at the time was a big number. Netbooks were soon envisioned to follow along the feature set of the OLPC.

That's when all hell broke loose.

The announcement shocked the tech industry. In late 2005, the only computer found for $100 was stolen, was dead, or was ancient enough to require Windows 95. A real and functional computer for a $100 was a dream, but also made people wonder what sacrifices might need to be made to offer such a comparatively inexpensive machine. The big differentiators at the time were CPU details, storage capacity, added software, and display characteristics.

Intel and AMD in late 2005 were nearing the point where 64-bit CPUs were taking hold. The CPU industry was at a cusp, as processor speed of 32-bit CPUs coupled to their power consumption were differentiators; dual-core 64-bit CPUs were two years in the future. Apple was using IBM's PowerPC chip.

Microsoft's Windows XP, long in the tooth in 2005, dominated desktop and laptop computers. Microsoft's disastrous Vista operating system would be ready in 2006. Apple's MacOS X was merrily running on PowerPC G4 processors. Intel's Atom hadn't arrived. ARM processors were just starting to get traction in mobile devices.

But the laptop industry's big problems in terms of value had to do with speed versus quality of display (and storage) versus battery life. Machine weight was becoming bloated as large laptop display sizes and the desktop-replacement version of laptops emerged. Mobility was popular, but proprietary batteries with short lives and warranties for batteries from some vendors of just 90 days set the stage for a re-think. Netbooks for $100 provided just that.

The OLPC DNA was set as "The Children's Computer", initially designed to use the Linux operating system, whose use on desktop and notebook machines hadn't been very popular—but the cost of Linux and free/open source software kept the cost low. Later, after much fighting, Microsoft's Windows XP would be offered for just $3 on OLPC machines as an option alongside the Fedora distribution of Linux.

Battery life was to be long in the original OLPC design, which was dubbed the XO-1. An OLPC option was a hand-crank to generate the two watts of electricity needed to power the unit, but this feature was more conceptual-- and also served to drive the point that the OLPC was meant for a world where electricity might not be available or in spotty supply. To keep battery consumption low, an internal hard drive was waived in favor of solid-state storage—a solid-state one gigabyte disk (SSD). Its display was redesigned to cut power consumption to a minimum.

From this proposed DNA, a market shake-up took place. The chaos that ensued helped mark the difference in attitudes between the third world consumers, and their more comparatively wealthy first-world buyers.

Big guns such as Intel's chairman at the time, Craig Barrett wanted to ignore the netbook category, dismissing the OLPC "gadget" as unusable. Of course the original spec called for an AMD processor rather than one from Intel. Intel would eventually become a supporter of the project.

Microsoft's Bill Gates dissed the netbook, saying smartphones connected to televisions would be a better idea. Of course, the OLPC's original specification also included Linux, rather than Windows, as its base operating system. Eventually, Windows XP would be offered alongside the slimmed-down version of Linux Fedora, called Sugar. By 2008, the first copies of the OLPC XO-1 were rolling out. It's up to 1.75, as of this writing.

The market change

The OLPC design, and its descendent— the netbook— was viewed as some sort of proletariat uprising that privately must have made big hardware vendors giggle. No, they said, we're not jumping into the OLPC and netbook market—it's not worth our time. Intel would eventually join the bandwagon, but was perceived by many initially reacting and reflecting US notebook makers. Nonetheless, the feature set inspired Taiwanese and Chinese computer companies lusting for new markets to bring their ideas to market. Their engineers went to work—after all, most all of the world's notebooks are made in Taiwan and China, and they're likely to have lusted after market growth that wouldn't have to pay a tax to their OEM clients like HP, Dell, and IBM.

Even today, notebook retailing is a matter of dominating sales channels. Large hardware vendors like HP and Dell have product lines whose features are divided into perceived business and personal computing product lines. Differing brand names are used to differentiate how models are ostensibly poised, so as to help customers self-identify with feature and service sets.

In turn, big-box retailers use displays of graduated price models that in turn reflect ostensible feature sets into classes of target markets, such as the biggest notebooks as reflected in the desktop replacement market. The OLPC and netbook designs fell conveniently underneath the existing brands and target models within the brands.

Netbooks were comparatively bereft of popular notebook features like built-in DVD drives, large and bright displays, special graphics chipsets, high-capacity hard drives, memory card readers, and the plentiful number of port jacks usually found on larger machines. More importantly, however, the low price of netbook hardware was difficult to ignore.

Asus delivered its first netbook, the Eee 700, to an early success. Cults started to emerge of Eee owners, and the OLPC had their first 'consumer'-spawned release as the OLPC was only sold to governments. With just 2GB of SSD storage, the Eee contained an Intel Celeron M processor and later editions have used Intel's Atom. However, the price was stunning at just $299—very inexpensive for the time. Although it was initially released with Linux, Windows XP and other operating systems versions became available.

In a way, some of the early hardware industry executive critics were right. Profit margins on netbooks were slim. Netbooks were originally designed for third world consumption, where a fatuous notebook might be as much as six months of an average person's annual wages. No money there in expensive notebooks, right? Yet netbooks were cute, light, portable, and importantly: inexpensive. Netbooks seemed to violate all of the rules of the laptop/notebook computer class, often having no internal CD/DVD drive, and usually no "hard" drive at all—using solid state disks/SSDs, instead. The Linux operating system was used to keep the price low—as well as the netbook hardware needed to run it.

Still, just two and a half years ago, organizations were praising netbooks. ABI Research claimed huge numbers of netbooks would be sold -- 35 million is their prediction.

Big hardware vendors were seemingly caught unaware of the netbook trend, while the manufacturing titans of Taiwan and China were rapidly embracing it. The netbook looked rosy, inexpensive, and with apparent high consumer demand.

But netbooks were murdered, and this is the story of how. Those found guilty have to pass three tests: motive, opportunity, and a weapon. There were lots of conspirators, each with a motive. The weapons were surprisingly numerous, too. Each one has a different opportunity. No single one of them murdered them, and while there was conspiracy, there was also the accident of bad timing: the right formula at the wrong time.

The big squeeze

Netbooks became pinched from several directions. First, smartphones functionality increased to the level of small (if difficult to functionally use) computers. The first nail in the coffin came with the release of the iPhone, followed shortly by phones based on a Linux derivative, Android. The iPhone met with fabulous sales across the planet and gave much needed software boost. Each smartphone operating system was the derivative of a mature desktop and notebook operating system—slimmed of extraneous items to form a core of applications to suit the form factor—and added features of Internet access and GPS systems. Conveniently, smartphones from Apple and Google were initially released on GSM mobiles platforms, opening a world-wide market.

HP countered their lack of a smartphone-class offering by acquiring Palm, then announcing a new web operating system. Microsoft bored the world with the ever-so-slow release cycle of their smartphone, based on a new version of Windows Mobile. And while the world had seen several Linux-based smartphones, Google took a Linux basis, and evolved the Android platform on their own to suit smartphone hardware makers—and to allow them to compete with Apple.

Laptop/notebook counters to the netbooks also arrived on the scene quickly. Apple released the MacBook Air, a sub-three pound, SSD-based machine at a price initially nearly eight times the inflation-adjusted OLPC price ($1,799). Dell countered with the M1330—light and feature-packed—to be eventually replaced by a genuine netbook, the Dell Inspiron Mini 9.

Another squeeze came from a different angle: the Apple iPad. With an entrance point at only double the inflation-adjusted price of the OLPC (at $499), here was another SSD-based device—but without a pesky keyboard, that used what was still another cut into the netbook—an evolved software application ecosystem, based on iTunes as a delivery portal that already existed for the iPhone. The iPad could use much of the software developed for the iPhone creating an instant ecosystem.

In the interim, the OLPC development groups struggled, and finally delivered the XO-1 model, rapidly followed by other OLPC models and sold them to governments across the planet. The OLPC machines, and netbooks in general, have no inherent operating system-based software ecosystem, and as download sites specific to operating systems, the iPhone/iPad/iTunes combination has proven to be a strong asset and competitive edge in terms of motivation towards purchasing Apple equipment. To an extent, the same is true of the Google (and Amazon) Android "app stores" (Apple is trying to trademark "App Store", so it's uncertain how long this term will apply generically).

If there was an appetite for easy-to-use, lightweight, entertainment and light computing devices, the netbook was supposed help fulfill that dream. Instead, it's been replaced in functionality by lower priced computers (a version of the MacBook Air became available for $995) having more capacity and better specs than the OLPC—while retaining light weight, high battery power conservation, and SSD devices without a plethora of jacks and an integral DVD drive—and the smartphone and pad/tablet genre.

Tablets are usually lighter than even netbooks. Tablets, like the iPad, Xoom, Amazon Kindle versions, have a cost that's either close to the inflation-adjusted OLPC price or only one multiple, rather than 10 times the OLPC's target price where fatuous notebook systems are priced. Low-cost or free applications and an evolved ecosystem of application selection and delivery mechanisms—usually via 3G mobile carriers—also mean that netbooks comparatively suffer, as do other notebooks and desktops, from an Internet connection guarantee.

Dead, but not forgotten

The OLPC and its progeny, netbook machines, are essentially dead but will become an interesting footnote in history. Netbooks were reviled as toys, but unwittingly, they caused a revolution in small form factor, yet highly functional mobile device offerings.

While small systems, smartphones, and even tablet machines were invented before the OLPC was announced, the OLPC crystallized criticisms surrounding the laptop/notebook drove change. Microsoft to reconsider the value of XP, hardware devices to seriously start to use SSDs (starting a consolidation of the hard drive industry), and the barrier-to-entry for world-wide computing was effectively lowered—with variety. The netbook was squeezed to death, but perhaps we're happier for that.


Sugar Labs wants the world to understand that the OLPC isn't dead. They notified me about the fact that the mission is still there, and undoubtedly, the need is still there. The Netbook is one of the progeny of the OLPC project, and in contrast, it's laying face down, bleeding on the carpet, as tablets, smartphones, and down-sized notebooks have flooded the marketplace. Proletarian computing has met the heavier profitability and popularity of other categories, and met its match.

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