Netbooks: What's All The Fuss?

Netbooks are cropping up in the American landscape like mushrooms after a spring rain.

Walk through any coffee shop, public park or airport terminal and you're certain to see folks hunched over and squinting at tiny netbook screens, tapping away on the devices' Chiclet-like keyboards. Despite the ergonomic implications of netbooks, their price and portability clearly hit a chord with consumers.

Typically priced below $400, netbooks offer a diminutive form factor, usually weighing less than three pounds and sporting 10-inch or smaller screens. They're also known for their low-power processors, which pack less oomph than those found in their notebook cousins but also promise longer battery life. Most commonly, they come with Microsoft XP Home or Linux operating systems.

But the future of netbooks in the business sector is still somewhat murky. Companies will have to find ways of weaving netbooks into their business operations in a way that generates cost savings without heightening security risks. That may yet come to pass, but for now, most organizations are watching and waiting on the sidelines.

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"We're getting a lot of inquiries, but so far we haven't seen any companies making a broad transition to netbooks," said Ron Perkes, vice president of product marketing at Tangent, a Burlingame, Calif.-based system builder.

Netbooks certainly have their share of detractors, for whom usability, security and durability issues remain a stumbling block. Although netbooks have more than enough power for basic computing tasks such as e-mail, word processing and Web browsing, their small screens don't lend themselves to large spreadsheets and other business applications, said Travis Fisher, executive vice president at Inacom Information Systems, a Salisbury, Md.-based solution provider.

These types of limitations have led to the stigmatization of netbooks as mere novelty or fad items, and that label could be tough to shake. Last October, when Steve Jobs was asked whether Apple would enter the netbook market, the CEO responded: "We don't know how to build a sub-$500 computer that is not a piece of junk." Jobs also suggested that Apple's iPhone could be considered a netbook in terms of the experience it provides to users.

Still, if netbooks continue their current growth path, it's hard to imagine that they won't eventually gain a modicum of traction in the corporate world. Analyst firm Gartner forecasts global netbook sales of 5.2 million this year, 8 million in 2009 and 50 million in 2012. ABI Research, meanwhile, predicts worldwide netbook shipments of about 35 million this year, and 139 million in 2013.

Netbooks are also making significant headway in the channel. Netbook sales through distributors jumped 66 percent in the fourth quarter of 2008 compared with the previous quarter, and nearly one in four notebooks sold through distribution during the quarter was a netbook, according to NPD Group.

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It's tempting to attribute the success of netbooks to their friendly price tags and the sagging economy. But there's more to it than that. PC vendors have been shrinking their notebooks for years, and had been moving toward the netbook form factor long before global economies began to crumble. Some IT professionals feel that with netbooks, vendors have simply hit on a feature-price ratio that resonates with consumers.

Similarly, several aligning IT industry trends could drive netbooks into more widespread business usage, and perhaps trigger an explosion of corporate netbook sales. For example, the growing usage of cloud computing and networked applications has diminished the importance of local processing, according to solution providers.

"The future of netbooks in business really comes down to cloud computing. If everything gets pushed to the cloud, they make a ton of sense," said Jeff Roback, CEO at Praxis Computing, a Los Angeles-based solution provider. "Netbooks are just the latest version of the whole Citrix [thin-client] discussion that's been going on about pushing the intelligence upstream."

If the current economic malaise continues, more companies will likely shift to a distributed work force as a means of cutting costs, and that could translate to more demand for netbooks. Inacom Information Systems is capitalizing on this trend by positioning netbooks as replacements for more expensive wireless terminal devices that feed data back to corporate networks.

In warehouses, for example, netbooks can be strapped to a forklift or easily transported while employees are fulfilling a picklist. And some law enforcement agencies are now looking at netbooks as alternatives to expensive ruggedized notebooks, according to Fisher.

"Netbooks are more functional than PDAs, and they're cheaper and more portable than notebooks," Fisher said. "In rugged environments, a broken netbook is very cheap to replace, but a new one can be set up in a matter of minutes."

Tangent's Perkes expects netbooks to make medical industry inroads once manufacturers find a way to extend battery life beyond the current three- to six-hour limit of most models. "For the medical field, that's critical, because it would allow hospitals to deploy netbooks in many types of mobile scenarios," he said.

But even if netbooks never gain traction in the business world, and remain a vertically focused niche item, they've helped solidify the notion that users can benefit from having an 'auxiliary PC' that complements their main PC. Apple's release of the MacBook Air helped create this idea, but netbooks have taken it mainstream.

To Andrew Brust, chief of new technology at New York-based IT consultancy twentysix New York, the entire netbook category appears to be simply a 'corrected' version of the Ultra-mobile PC form factor.

"If all you want to do is surf and work with productivity applications and communicate, then netbooks are great," he said. "Many netbooks have built-in Web cams for video chat and work really well for text-based IM as well. If I can have all this plus a modern OS, why wouldn't I buy it? It's a relief from lugging the laptop and much more functional than my phone, for a little more money."