The Rise and Fall of Netbooks

It was sometime in the middle of 2007 that we first heard of the term netbooks. Then, in June 2007, Asus and Intel announced the Asus Eee PC — a 7-inch, flash-based laptop with a shocking price tag of only $199PHP 11,678INR 16,865EUR 190CNY 1,448.

Prices of laptops back then were still north of Php40,000USD 682INR 57,784EUR 649CNY 4,964 so the prospect of having a very cheap laptop, despite the meager hardware specs (512MB RAM, 4GB-16GB storage) was very encouraging in a market that was still dominated by desktop PCs. In way, it was a great way for consumers to get acquainted with computers.

When the Asus Eee PC eventually landed in the Philippines, demand was so huge that street prices went up and stocks ran out very quickly. It was supposed to be in the Php18k range but retailed upwards of Php21k due to high demand (See: Unboxing the Asus Eee PC).

By early 2008, the netbook craze went along with many other brands joining the fray (Read: 10 Things You Need to Know about the Asus Eee PC). Asus sold over 300,000 units in four months and continued by releasing several iterations of the 7-inch, 9-inch, 10-inch and 12-inch netbooks (Asus had 30 models of the Eee PC!).

Others followed suit — Acer, Gigabyte, MSI, Samsung, Lenovo, HP, Dell, and a few more.

Intel’s Role with the Atom

The original netbooks were powered by Intel’s Celeron M with a single-core processor running at 630MHz. It was underpowered and had a TDP of 5W.

Intel was already working on a netbook-specific processor and by Q2 of 2008, they announced the Intel Atom processor. The Silverthorne Z5xx had a TDP of just 0.65W to 2W while the Diamondville N2xx was doing 2.5W in a 45nm process. Despite this, the limited processing capability meant that netbooks were only meant for basic stuff like web browsing, word processing, worksheets and media playback (although back then, I managed to do a little bit of Photoshop as well).

Intel was aggressively pushing for Netbooks due to the fact that its Atom processor was in the middle of it all. Needless to say, the Atom processor was a volume driver, and by the fourth quarter of 2008, Intel was getting an 81.8% share of global microprocessor revenue. Netbooks were eating market share from regular notebooks too due to the price point.

The Downhill Trend

By 2009, Netbook market share was almost flat and manufacturers continue to make iterations by making them thinner, more lightweight and with premium finish. New models would come out every 2 or 3 months with dozens to choose from multiple manufacturers. Even local brands joined the fray — the Redfox Wizbook started out with an AMD LX800 500Mhz processor in 2008 then eventually switching to an Intel Atom by 2009 (Redfox Wizbook N1020i) while another local brand Neo also came out with the Neo Basic netbook that retailed for Php19k.

A rare Toshiba netbook running NVidia Tegra 250 processor and Android 2.1 OS.

With so many new models coming out, the market was naturally saturated with netbooks. At its peak, Netbooks was getting around 20% of market share across all portable computing devices.

By early 2010, it was already downhill for the netbook and it was due to so many reasons. For one, the more upgraded netbooks were hitting north of the Php30k price point. Full-fledged laptops were also getting into the netbook territory (sub-Php30k). Lastly, tablets were on the rise, thanks to the growing popularity of Apple’s iPad.

With a starting price of Php23,999USD 409INR 34,669EUR 390CNY 2,978 in 2010, the iPad was poised to be a strong challenger to the netbook.

There’s been a huge debate on whether the iPad can replace the netbook. I’d blame Steve Jobs for openly challenging the netbook market and touting the iPad as the better alternative to mobile computing.

If your netbook usage pattern is strictly consumptive (i.e. surfing, chatting, email, social networking) then the iPad can easily replace the netbook for those tasks. In some instances, the iPad might even offer a better user experience over the latter (like reading for hours on end). — Apple iPad Review 2010 [YugaTech]

By 2011, sales of tablets surpassed that of netbooks and by the following year (2012), netbook sales dropped 25% year-on-year. Dell was first to call it quits in December 2011 and this was followed by Toshiba in May of the following year.

Around mid-2012, there was a new craze — the ultrabooks. By Q3 of 2012, the big players like Asus, MSI and Acer also announced they’ll stop manufacturing 10-inch netbooks.

In Retrospect: Netbooks (2007 – 2012)

Netbooks had a good 5-year run. It introduced a lot of people to consider the laptop as a primary computing device which eventually led them to upgrade to a full-fledged laptop.

As volume of production increases, the cost to manufacturer became less expensive and that gave ODMs the ability to improve and develop their R&D. This paved the way to better and more powerful computing devices like ultrabooks. In a way, the netbook ignited that transition.

Let us know what you think. Was your first laptop actually a netbook?