Intel evaluating new netbook concepts, form factors

Netbooks have been one of the major success stories of 2008, but recent comments from Intel indicate that the company isn't satisfied with current device form factors. Speaking at a Raymond James IT Supply Chain conference last week, Stu Pann, an Intel VP of sales and marketing, admitted that Intel initially miscalculated the market segments that netbooks would appeal to.

"We originally thought Netbooks would be for emerging markets and younger kids... It turns out the bulk of the Netbooks sold today are Western Europe, North America, and for people who just want to grab and go with a notebook," Pann said. "We view the Netbook as mostly incremental to our total available market."

Pann also noted (his comments can be streamed here) that netbook screen sizes don't lend themselves to long-term use, saying, "if you've ever used a Netbook and used a 10-inch screen size, it's fine for an hour. It's not something you're going to use day in and day out."

Consumer interest in netbooks definitely caught Intel off-guard, and it took the company months to ramp Atom production in order to satisfy demand. I agree with Pann, when he portrays netbooks as providing an "incremental" increase to Intel's total market, but I'm not sure he's right when he states that consumers won't use a netbook on a daily basis. It's true that the majority of us would have a massive headache after trying to work on a 10" LCD all day, but why assume that a netbook user is perpetually limited to the device's display?

A typical Western netbook user will have access to a much larger secondary display, as well as a keyboard and mouse at both work and home. Combined, these three simple devices negate the unfortunate physical aspects of netbook use. Mobile users, meanwhile, are more likely to use a netbook for short spans of time, which would fit within Pann's "fine for an hour" distinction.

Given how popular they've become, it's easy to forget that netbooks are only a year old, while the Atom itself has only been on the market for approximately six months. The device manufacturers themselves are still experimenting with features, sizes, and price points; it would be downright short-sighted for Intel to bring down the gates on experimentation and categorically lock the definition of the netbook form factor. What Pann failed to address—and it's a significant point—is that the sudden jump in netbook sales might be indicative of a long-term purchasing shift.

It's been posited that one reason netbook sales spiked in 2008 is because consumers were concerned about the economy and opted to purchase a cheaper, more portable system, which would fit Pann's "grab and go with a notebook," theory. But the continuing popularity of these smaller systems indicates that consumers like them, and have generally found that they provide an adequate amount of horsepower. Ultimately, yes, a netbook is just a smaller notebook, but a significant number of shoppers appear to want a smaller, cheaper, notebook.

Full-size notebooks aren't going to go away, anymore than full-size desktops are; there will always be a group of buyers who want more computing power and will trade portability for it. Nevertheless, I think the rise of netbook sales in 2008 is the beginning of a buying pattern rather than a trendy spike.

Second-generation netbooks, including hypothetical models with larger screens, will cast a wider net and capture groups of buyers that weren't interested in earlier models. Meanwhile, existing netbook owners already seem to be using these devices "day in and day out." If you're a current netbook owner, or are interested in buying one, what's your take on this? Are you buying it as a device you intend to use on a daily basis (even if it isn't your only system) or will it be confined to occasional portable use?

Resource - Ars Technica