I’m going out on a very sturdy limb to predict that in the next 18 months, the rise of netbooks will have a major impact on the computer industry. I think this will be reminiscent of the impact of cheap cell phones on the traditional telecommunications industry (though not nearly as profound).

In case you’re unfamiliar with the concept, a netbook is an inexpensive ($200 – $500) ultra-portable notebook computer with a 10-inch or smaller screen. They’re typically powered by a special class of low-power processor (for example, an 1.6GHz Intel Atom). They are specially designed around wireless communication and access to the Internet, and are often targeted at cloud computing users who don’t require a powerful computer. Most netbooks run Windows XP or some variation of Linux, installed at the factory. Indeed, 80% of netbooks run Windows XP. Netbooks don’t have optical drives.

The New York Times reports that netbooks “are the big success story in the PC industry, with sales predicted to double this year, even as overall PC sales fall 12 percent, according to the research firm Gartner. By the end of 2009, netbooks could account for close to 10 percent of the PC market, an astonishing rise in a short span.”

I love the netbook concept – an energy efficient, inexpensive machine you can bring anywhere. There is a niche for such a device. The iPhone is almost there, but is still a little too small for long-form typing. Standard notebooks are overkill for many tasks, and also may be inadvisable to use in certain situations.

For the past week, I’ve been testing an Asus EeePC. It’s about the size of a hardcover Tom Clancy novel (or Danielle Steel, take your pick). It has a 10-inch screen, 1.3 megapixel webcam, 1.6GHz Intel Atom processor and 2GB of RAM. It came with Windows XP. I promptly installed a special netbook-friendly version of Linux called Eeebuntu (which is by far the nerdiest thing I’ve ever done).

Overall, I’m impressed with the EeePC. It’s fine for very basic tasks. I’d gladly it to a library or coffee shop, out to the park, or even on a short trip. It’s also great to use around the house for websurfing and research. That’s what it’s designed for; not image editing, DVD-watching, or even advanced word processing. The netbook is a great second or even third computer.

I admit that it was a relief whenever I went back to using one of my Macs—even an old, battered and sloooowwwww 12-inch PowerBook. Part of that was using better hardware, especially the screen, keyboard, and trackpad. Most of the relief was from using OS X, which truthfully is far superior to the other OS’s I had on the netbook.

Many people hope that Apple will eventually release a true netbook (including me). This would be distinct from the MacBook Air, which has a 13.3-inch screen and emphasizes thinness over small size. The elegance of OS X could scale wonderfully to a sub-10-inch screen—much better than XP. Apple’s netbook probably wouldn’t be as inexpensive (cheap) as the other models, but it would probably have much better hardware and a few unique “gee-whiz” features.

Currently, Dell, HP, etc. are selling netbooks without cannibalizing notebook sales. At the same time, netbooks have razor-thin profit margins, and all netbook makers are currently locked in a race to the bottom of the barrel in terms of price and features. Apple never tries to compete in that space, instead offering middle and high-end computers with premium design and features. A premium netbook from Apple might help other netbook manufacturers by disrupting their current dead-end race, and reemphasizing features and design. I’m really hoping Apple adds their own unique contribution to this exciting new field.


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