The rise of the Netbook

While walking in Media Markt's laptop aisle yesterday I was surprised to see the number of mini laptops (Asus EEPC, Acer Aspire 1, Toshiba netbook etc.) in the €299-500 price range. Interestingly, some of them are being sold like cellphones - with a price tag of just 1 Euro with a 2 year "3G data plan". The data plan costs 37 Euros, and probably gives customers a few GB of bandwidth a month.

So adopters get to carry their *free* netbook and Internet connection anywhere, without paying outrageous Wifi hotspot/hotel Internet charges. Perhaps in a few months this Netbook offer will spur many to switch to 3G Internet and give up on tethered Internet (cable, DSL) entirely. Are we looking at this cannibalization in the next couple of years? Low cost cellphones cannibalized fixed line telephone users. Can netbooks with 3G data plans cannibalize tethered DSL?

It all depends on the service quality of 3G data vs. DSL. Now 3G data can seldom serve more than 100s of kbps versus the multiple mbps of DSL connections. But I hazard that there is a sizeable market segment to whom the mobility (and free netbook) will appeal more than blitzy Internet connections.

Another issue will be the scalability of 3G data - 3G infrastructure has some fundamental bandwidth limits - which make a mass deployment in dense areas problematic. There is LTE, the next generation of cellular wireless networks that promises much more bandwidth, but its deployment is only planned over the next decade. Perhaps mass data demand over wireless will speed things up for LTE (or WiMAX).

The multi-person home tethered service is probably safe from wireless 3G data for now. Splitting 3G bandwidth is certainly possible via Internet sharing or a router that accepts a 3G data card and then wifis the bandwidth to multiple home PCs, but the slow speed will be an issue for demanding applications like online video, gaming, etc. 3G data is still a 'midband' service. Moreover, netbooks are difficult to use with their small screens and cramped keyboards. Presently deployed laptops and desktops are certainly more comfortable (minus their limited mobility).

The Netbooks' rise is absolutely remarkable. A couple of years ago MIT's OLPC project was the seed of the idea to create cheap affordable laptops for school children in developing countries. Then Intel threw in its own school laptop competitor. Asus stole the commercial show with its EEPC 701. Intel's spectacular strategy of creating the low-power Atom processor created a captive netbook market for Intel and allowed for smaller and lighter batteries. Microsoft resurrected Windows XP as the Netbook operating system while Linux provided a free alternative to Windows XP. And then there is the 3G data availability through USB sticks.

It all seems to have come together at the right time.

ASUS EEPC horror story

Last week I was at the Tridentcom conference in Innsbruck. There, while attending a talk, I saw first-hand the horror of a presentation gone completely wrong, the discomfort of the audience, and the pain of an embarrassed speaker as his ASUS EEPC failed miserably. The presenters beautiful slides were cut horizontally (about 30% of the lower part of each slide was missing) because the ASUS EEPC could not drive the overhead projector properly. Every other laptop, including old clunky student-budget ones, running Windows , Linux, and Mac OS, were successful in beaming presentations. But not the ASUS EEPC.

There are many objective reviews of laptops on the Internet based on specifications, design, speed, etc. They try to compare products side by side so that potential buyers can choose the product that is best for them. Still, somethings are considered standard and not even mentioned - like the assurance that the power adaptor will charge the laptop's battery, the battery won't burst, the USB ports will work, and the VGA output will work. Seasoned customers are smart enough to get a mix of online and off-line opinions about a product before buying it. But sometimes when products are just released, it is hard to ascertain whether a product will serve its purpose down the road. I hope this EEPC horror story gives folks some additional information before they buy it.

Its all nice to tout the small, cheap ASUS EEPC. But seriously, didn't VGA-out technology mature like 15 years ago? And ASUS cannot even get this right in 2008? My 2 cents - get a second or third hand Pentium 3 laptop or something instead.