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Hybrid tablets inherit the (MSI) wind

In a signal that the era of cramped mini-laptops (aka. the "netbook") is drawing to a close, Acer, Inc. (TPE:2353) and ASUSTek Computer Inc. (TPE:2357) both look set to kill their netbook efforts, according to a report by DigiTimes.

I. Riding Into the Sunset

Taiwan's ASUSTek -- which recently stole the crown for fastest year-to-year growth from Hong Kong-based Lenovo Group, Ltd. (HKG:0992) -- is set to kill to perhaps the most iconic netbook, the EeePC.  Writes DigiTimes:

ASUSTek CEO Jerry Shen recently confirmed that the company will stop production of Eee PC netbooks using Atom-based processors such as the N2600 due to impact from tablet PCs and notebooks, as well as a sharp drop in demand in emerging markets. ASUSTek plans to have its Transformer tablet PCs fill the 10-inch mobile device market, replacing its netbook product line.

For Acer -- maker of the Aspire One series netbooks -- and Micro-Star International (MSI) Comp., Ltd. (TPE:2377) -- maker of the Wind -- there was a deafening silence in terms of any new Atom-based netbook announcements at Computex 2012 , leaving little doubt they too are eyeing an exit from the dying netbook market.  Acer has denied an exit as recently as Jan. 2011 of last year, but plunging sales have put an end to those vocal denials of late.

In Q3 2011, Acer reportedly shipped 1.7 million netbooks worldwide, ASUSTek shipped 1.2 million, and MSI shipped under 1 million units.

Acer Aspire One
The Aspire One by Acer is the best-selling of the netbooks currently, but it's shipping under 2 million units a quarter. [Image Source: Acer]

To be fair, it's possible that netbooks will linger around a bit longer, albeit powered by cheaper system-on-a-chip offerings from Advanced Micro Devices, Inc. (AMD) rather than Intel Corp.'s (INTC) faster, but pricier Atom SoC line.  Indeed, Acer's last netbook model to be announced was the Aspire One 725, which packs a AMD C-60 "Fusion" accelerated processing unit and launched in mid-May.  But the switch to AMD SoCs seems more like a brief stay of execution, rather than a pardon for the condemned netbook.

Some OEMs like Toshiba Corp. (TYO:6502) and Dell, Inc. (DELL) unofficially began their exit process months ago.

II. Tablets Killed the Netbook Star

In the end, for all the speculation that the tablet would kill the traditional PC, its victim lie elsewhere; it was the netbook that today is suffering an ill end.

But tablets are not the only factor that's killing the netbook.  Intel has been aggressively targeting higher price and performance points -- even with its "budget" Atom line.  Ultimately, Intel is seeking to push customers towards higher-margin Ultrabooks, which it views as the computer of the future.

Windows 8 also was bad news for the netbook.  With the upcoming Microsoft Corp. (MSFT) operating system's touch-screen mandate forcing OEMs like Acer and ASUSTek to add multi-touch screens, prices will indubitably rise on the low-end pushing budget models outside the traditional netbook price band.

In a sense the netbook may survive -- or even thrive -- in a way, in a new, pricier package.  Acer and ASUSTek have big plans for Windows 8 hybrid tablet/laptop devices.  Typically packing screens of about 10-inches, the hybrid tablet is a modern reimagination of the netbook, in a more slender and graceful wrapper.

Hybrid tablets will be more diverse than the netbook, as OEMs can now elect to use ARM-architecture chips from SoC makers like Qualcomm, Inc. (QCOM).  But they also are expected to be pricier.  Recent commentary hints that ARM Windows 8 hybrid tablets may be priced at around $500 USD, while Intel-powered units will hit somewhere in the $600-$700 bracket.

The netbook is survived by the new pricier hybrid form factor. [Image Source: Lenovo]

In other words, the main reason why a hybrid tablet is really not a netbook boils down to price.  Today the cheapest Aspire One (the D270) retails for about $270 USD, MSI is selling refurbished Winds (U230s) for about $200, and the ASUSTek's EeePC (X101CH) is $260 USD.

All of those will soon be replaced by designs which will likely be anywhere from 1.5 to 2 times as expensive.  So rest in peace/pieces netbook, you were the king of the bargain, and surely fondly remembered by some, even if your once-loyal fans forsook you for pricier tablets and hybrid devices.

Source: Digitimes

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They don't want you to be happy
By flyingpants1 on 9/8/2012 1:45:27 PM , Rating: 4
The manufacturers do not want you to have a great device for $200, because their profit margin is higher on more expensive devices. So when you get a fully-functional netbook for $200, it cannibalizes their sales of higher-end equipment.

Of course netbook sales are suffering. Atoms are worthlessly slow. If Intel wanted to, they could create a netbook CPU with the thermal envelope of the Atom (2.5-10W), with much better performance, like a 22nm Intel Core Solo or ULV IVB Celeron or something. Combine with a 10" screen, some form of SSD (hybrid or 120GB SSD or mSATA cache), and extended battery, sell it for $200-300. And suddenly they can't sell 11.6" Ultrabooks for $1000 anymore, because nobody wants to pay an extra $700 for a thinner case and Core i5.

As with everything else under capitalism, the companies dictate the entire market and the consumer just takes whatever they can get, for better or for worse. In this case, worse.

By tecknurd on 9/9/2012 1:23:39 AM , Rating: 2
I think manufactures caught on that Intel Atom processors are slow. Also Intel wants to sell the name Ultrabook. Ultrabook is similar to an Apple Macbook Air and everybody wants one, but can not have one because of the price. The Ultrabook will eventually will be as cheap as $500 and maybe cheaper with of course plastic. Though tablets are getting to the point of becoming more powerful and speedy compared to the Intel Atom processor, so tablets are way to go.

Actually, people prefer to go light-weight when traveling, so a netbook or something else with more power and with the same weight as a netbook is better. Netbooks can not do much. Some sites fill up a whole screen of a netbook. Internet videos on a netbook are skippy.

Capitalism is two or more companies competing for your money or dollar. Still the customer has a choice. Companies still follow the customer's choice. Unfortunately, people or customers buy products that may not be the right choice, so companies move in that direction. Still it is best to vote with your wallet if you want a certain favorite product to succeed and make sure you tell everybody to buy the favorite product that you bought.

RE: They don't want you to be happy
By KFZ on 9/9/2012 2:46:50 PM , Rating: 3
And we could have an economical, robust transcontinental rail system, roads that last for 50 years, an efficient power grid and a simple tax code. Welcome to reality.

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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