Print 29 comment(s) - last by Apone.. on Sep 10 at 12:26 PM

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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RE: Good riddance
By Jeffk464 on 9/8/2012 5:13:36 PM , Rating: 2
Isn't the ultrabook replacing the netbook as the more portable laptop device? Ultrabooks are basically just netbooks with better hardware, allowing them to be even more portable and more useful. There is a market for the 10"-12" laptop format, granted a lot of people just bought netbooks because they were cheap.

RE: Good riddance
By lagomorpha on 9/8/2012 5:16:24 PM , Rating: 2
An ultrabook is a netbook with a higher price tag. Why this is a good thing for consumers is a mystery.

RE: Good riddance
By Jeffk464 on 9/8/2012 5:26:14 PM , Rating: 2
I agree with you not everybody needs the higher end cpu, but the better screen and SSD are a nice step up.

RE: Good riddance
By Taft12 on 9/9/2012 6:15:55 PM , Rating: 2
There''s no mystery here -- nobody bought netbooks and nobody's buying ultrabooks.

RE: Good riddance
By Apone on 9/10/2012 12:26:23 PM , Rating: 2
@ Jeffk464 and lagomorpha

To clarify the difference between netbooks and ultrabooks, you have to examine the original premise of each. Back in 2007, Asus conceptualized the idea of a netbook when they discovered many customers just wanted a notebook the net. Simply web browsing wouldn't require a DVD optical drive, powerful hardware, or a large 15+ inch screen. So this is the inspiration for the netbook.

However, the one problem that obviously remains yet to be fixed is that many customers have the misconception that just because netbooks are cheaper than traditional notebooks, their performance must be the same which is simply not true and unfortunately they found out the hard way. Netbooks are only good for...surfing the net.

Ultraportable computers, which have been around forever, have a similar-netbook chassis but retain the powerful hardware found in normal-sized laptops (hence the significant price premium of ultraportables).

Ultrabooks are basically the descendants of Ultraportables because Intel is pushing for this continued "thin and lighter + still powerful" is better (ahem, Macbook Air). In addition to simply have more powerful hardware than a netbook, laptops that are to qualify as "ultrabooks" must pass Intel's ultrabook checklist. This includes:

1.) Having certain thin & light chassis dimensions
2.) Must be able to come alive from sleep within 7 seconds, 3.) Have something like 5-8+ hour battery life
4.) Must have USB 3.0 or Thunderbolt
5.) Must have certain built-in security measures
6.) Of course it has to have an Intel Sandy or Ivy Bridge CPU

Not sure if anyone can confirm, but it remains to be seen whether or not ultrabooks are yielding solid sales volume to justify continued production.

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