Summary
The age of high-powered, application-generic desktop and notebook PCs is giving way to smaller, lighter, more targeted netbooks that satisfy most consumers' needs.
Analysis
The average computer user is not a high-end gamer, not an engineer or physicist running complex analyses, and is not a professional multimedia producer. It's your spouse, your parents, your friends for whom convenience, portability, and connectivity makes the netbook "good enough".
Netbooks use very power efficient processors, often with multimedia engines designed into the silicon so that consumer-oriented tasks like movie watching or music playing work well and don't tax the more limited processing power. Netbooks are great for the vast majority of consumer-centered activities, like reading/sending e-mail, watching Hulu or listening to Pandora. The ARM-based processors that power the netbook run circles around the "battleship" Intel and AMD processors and system components that drove cost and power consumption. An entire generation of consumers has become used to smaller screens, suffering for years with small cellphone and smartphone displays. The step up to a 10-inch (26cm) high-resolution, brilliant netbook display is a breath of blue sky.
Much like what happened to GM and their reliance on trucks and SUVs, the netbook threatens major manufacturers of desktop and notebook PCs. The next few years will see huge growth in mobile internet devices, netbooks, smartbooks, connected internet companions like the Chumby and the Wayve. For the smart netbook vendor, the potential multiplication factor due to the shrinking size, cost, and complexity opens up brave new lands. For those stuck in the battleship world, there's stormy seas ahead.
Jon Adams consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
