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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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Good riddance
By zlandar on 9/7/2012 11:43:31 AM , Rating: 2
I bought the Dell version a couple years ago when netbooks were taking off. Talk about utter garbage. It was beyond slow and the keyboard layout sucked. Laptop prices have fallen so much you can get a low-end laptop for $300 that will run rings around these underpowered POS.

RE: Good riddance
By lagomorpha on 9/7/2012 1:43:51 PM , Rating: 1
Of course it was terrible, you bought a Dell. All that spyware/crapware is going to bog down an i7 to say nothing of an atom. If you had gotten an Asus you would have been fine so long as you were realistic about what games it won't run and get over 12 hours of battery life.

Sometimes you don't need that much power. I have an e350 in my media computer with an ssd running win8 and it works perfectly.

RE: Good riddance
By piroroadkill on 9/8/2012 10:25:44 AM , Rating: 2
What are you talking about? Dells are perfectly fine.

Early Atom netbooks, however, sucked. Where I work I have over a hundred eeepcs, and they are unimpressive to say the least.

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.

Atom faster than Fusion?
By ICBM on 9/7/2012 4:20:40 PM , Rating: 3
When did the Atom become faster than the AMD fusion counterparts? Thought the E series was always better by a fair margin.

RE: Atom faster than Fusion?
By A Hitman on 9/7/2012 6:26:24 PM , Rating: 2
When hell froze ov.....
Oh wait, they never did, did they?

RE: Atom faster than Fusion?
By Jeffk464 on 9/8/2012 5:15:14 PM , Rating: 2
I don't think the atoms are faster, but they are getting them lower power than zacate. AMD has no answer to intel's tablet/phone version of atom.

RE: Atom faster than Fusion?
By Visual on 9/9/2012 9:55:58 AM , Rating: 3
There is a very simple and obvious explanation for that statement - the article author was dropped on his head as a baby.

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.

I've had my netbook for 4 years now...
By Boze on 9/7/2012 11:30:10 AM , Rating: 2
...and its still going strong for the usage scenario for which I purchased it:

Internet Browsing
Microsoft Office
Visual Studio

I paid $299 at the Meridian Naval Air Base Exchange for it. I don't use it to actually compile the programs I write in Visual Studio, but its nice to work natively in my preferred coding environment and then be able to just transfer the files over to my home server when I get back from the traveling.

The only other device which has seen as much use as my netbook is my Kindle Keyboard 3G.

Nowadays though, I will concede that many Windows-based laptops meet or exceed the battery life of my netbook (6 hours). However, I still have no desire or need for a tablet. They remain, for me personally, an unnecessary and pointless luxury.

RE: I've had my netbook for 4 years now...
By Jeffk464 on 9/8/2012 5:21:07 PM , Rating: 2
Yup, my cpu power needs are low for my laptop so I got a 15" laptop with a netbook processor(zacate e450). I have been completely happy with it by the way,I have no need for some high end core i5 laptop. I'm actually looking forward to even cheaper, longer battery life, arm based laptops.

By Jeffk464 on 9/8/2012 5:23:17 PM , Rating: 2
The main hint for me was how much I can run and get done with a very low power chip on my phone. Lucky MS gave up on making every new version of windows more hardware demanding then the last.

Oh well
By damianrobertjones on 9/7/2012 11:33:15 AM , Rating: 4
Bit of a shame really as some offered fantastic battery life. Imagine new models with mSata SSD drives, smaller motherboards and much, much bigger batteries.


By Old_Fogie_Late_Bloomer on 9/7/2012 11:53:47 AM , Rating: 2
In a sense the netbook may survive -- or even thrive -- in a way, in a new, pricier package...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.

In my anecdotal experience, price has been a significant driver of netbook sales. People who can't afford to spend more than $250 to $300 on a computer aren't suddenly going to be able to spend $500 to $600 on one.

On the other hand, the kind of people who can't afford to spend more than $250 or $300 on a computer would probably be able to manage just fine with a Surface RT. If the rumored $200 price is for real, and if tablet and keyboard cover manage to land at around the same price as a traditional netbook...well, maybe that, right there, is the reason Acer got so upset at Microsoft.

By Old_Fogie_Late_Bloomer on 9/7/2012 1:30:45 PM , Rating: 1
Poor choice of wording on "the kind of people"-Do you mean poor people are a certain kind of people? I'm sure you did not mean to sound like an elitist, but it came off that way.

Hmm, yeah, I can see what you mean. Re-reading that statement, I realize it wasn't even saying what I was trying to say, so I'll give it another go. :-)

"On the other hand, people who find their computing needs are satisfied by a netbook would probably be able to manage just fine with a Surface RT."

My intent was not to disparage poor people (I'm not exactly living the high life myself) but was rather to say that some people don't consider computers a high priority in their life. They want to go online, they want to send email, do whatever, but they don't want to spend a lot of money to do those things, either because they don't have the money to spend after fulfilling their basic needs or because they'd rather spend it on something else. They're not compiling code or doing prepress work or editing movies or anything, really, that justifies buying anything more than a netbook.

On the other hand, I spent over $1100 to buy a nice 14" laptop with a lot of battery life and a high-resolution screen, because those features offer me tangible benefits and I considered them worthwhile. I had to sacrifice in order to make the purchase, too. Would I tell, say, my mother to buy exactly the same computer I did? Heck no. The difference between a $300 computer and a $1100 computer wouldn't really be worth it to her.

By Old_Fogie_Late_Bloomer on 9/7/2012 1:34:17 PM , Rating: 1
No need to downrank him, guys; his criticism was fair. It was a poor choice of words on my part, and it's what I get for trying to rush through a post while at work.

Its'a shame
By lemonadesoda on 9/9/2012 7:17:14 PM , Rating: 2
... that from the outset, netbooks have been underspecced. One of the best netbooks was the SONY with their high quality 1366x768 screen. It made a HUGE difference. But the whole sector failed due to INTEL with their underperforming Atom and their truly rotten chipsets.

IMO, a "netbook" with a "retina" screen, running a decent CPU is a far more practical offering than a tablet. It is as thought tablets or hybrids are successful PURELY BECAUSE of the poor design of netbooks.

Netbooks have always been an inferior toy...
By Beenthere on 9/7/12, Rating: -1
By Old_Fogie_Late_Bloomer on 9/7/2012 12:04:19 PM , Rating: 5
Choosing the device that's clearly superior in terms of portability and battery life over the one that gets only a few hours on battery and weighs a ton doesn't make someone gullible. It just means their priorities are different than yours.

Those different priorities drove my purchase of an Acer Timeline (13.3", so technically not a netbook) several years ago, when I needed a computer that I could use and carry around all day and was willing to sacrifice processing power.

In my final semester, when my Timeline developed screen problems, I tried to use a $300-$400 15.6" laptop to finish out the term, but I ended up buying a smaller device with better battery life (the Lenovo X130e). The Lenovo was a little over $500, but an equivalent HP model would have been competitive in price with the 15.6" clunker and would have met my needs better (as did the X130e).

RE: Netbooks have always been an inferior toy...
By MadMan007 on 9/7/2012 12:05:51 PM , Rating: 5
Hmm, I just inserted tablet where you were referring to netbooks and the statement still works.

By GotThumbs on 9/7/2012 12:59:53 PM , Rating: 5
Try typing a paper or working with pivot tables in excel....on a tablet.

Since we are all unique ..... that means we all have unique needs. Your free to point out short-comings with hardware, but don't assume you know whats best for everyone else.

That is ......unless Your channeling Steve Jobs.

By V-Money on 9/7/2012 3:04:43 PM , Rating: 2
Hmm, I just inserted tablet where you were referring to netbooks and the statement still works.

Almost, but I have to disagree slightly. Netbooks were cheap, so for a few dollars more you could have an actual laptop. Tablets are expensive, so you could save a couple bucks by just getting a laptop (plus you could do some real work, but you lose out on the cool points).

"Death Is Very Likely The Single Best Invention Of Life" -- Steve Jobs

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