Notebooks 2.0

Fresh off the pipeline: Michael Dell, founder and CEO of Dell, claims the anguish and self-condemnation one experiences 36 hours after a netbook purchase.

"If you take a user who's used to a 14- or 15-inch notebook and you say 'Here's a 10-inch netbook,' they're gonna say 'Hey, this is so fantastic. It's so cute. It's so light. I love it,'
"But about 36 hours later, they're saying 'The screen's gonna have to go. Give me my 15-inch screen back.'’

"We see a fair amount of customers not really being that satisfied with the smaller screen and the lower performance - unless it's like a secondary machine or it's a very first machine and the expectations are low,"

"But as a replacement machine for an experienced user, it's not what we'd recommend. It's not a good experience, and we don't see users very happy with those."

Problem is Mr. Dell, millions are happy with it. For the past two years, the industry has witnessed an explosive growth for these miniscule devices. Millions of these demure gadgets have been propping up everywhere in retail, and the masses seem to eagerly embrace them.

HP, Acer, Asus, and Toshiba have invested heavily in releasing competitively priced and well-designed netbooks to answer the rising demand. Even Dell tried it with their Mini product line, alas, a success it was not compared to it's Asian brethrens: Acer’s Aspire One and Asus’ Eee PC series.

Dell’s failure to conquer the low-end, price-conscious market puts a dent on the company’s ability to capitalize on emerging trends. It's obvious they failed to anticipate the sudden meteoric rise of the average man's laptop. The question is, why such harsh criticism from Dell's big boss?

Apparently, the all-too-consumer-friendly product ain’t too business-friendly after all – PC manufacturers know this. With rock-bottom profit margins, manufacturers will only recoup their investments after selling droves of netbooks. With such a glaring disadvantage, it should curtail them from churning out these low-profit generating pests right? On the contrary, consistent netbook releases and over-the-top marketing campaigns are but the craze nowadays.

Over the years, the PC business has shifted from desktops to notebooks as its main source of growth. During ’05 to ‘06, standard notebooks were running north of a grand, manufacturers were comfortable with the price point and decent margins. It all came downhill though the instance Asus introduced its Eee PC to the world back in ’07. The 7-inch 'companion laptop' disrupted the market dramatically. In less than a year, major PC manufacturers were planning a similar device to satiate the surprising wave of consumer demand for these types of notebooks.

Consumers loved it (they still do). Though not as powerful as other laptops in the market, netbooks were sufficient for word processing, surfing, and casual entertainment at a very low price (and still are).

Mr. Dell’s perception of the netbook doesn’t spur out of hate or disdain but rather of fear for the industry to settle with the new status quo. Perhaps the existence of the average man’s notebook is indeed beneficial to consumers, even too beneficial at times, but manufacturers are risking their financial viability to remain competitive by supporting such dirt-cheap devices.