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1. Is Mobile Computing the Next Big Market?

2. Light and Cheap, Netbooks Are Poised to Reshape PC Industry /New York Times

3.Netbooks, smart phones: Will the twain meet? /EETimes

4. Lighter on Laps and Wallets /New York Times



1. Is Mobile Computing the Next Big Market?

April 15, 2009

A new market is being developed, driven by the increasing demand for convenient mobile internet access. Today this demand is being met by netbook computers and the iPhone and its competitors. Netbook computers are now selling more units than desktop computers. The consumer wants a device that is cheaper, lighter, smaller, and has a longer battery life than the traditional laptop. The demand for the iPhone grew quickly because of its ability to meet these needs in a user friendly platform.

Lighter on Laps and Wallets describes the myriad of ways that people today are using their netbook computers.


Ron Maltiel (408) 446-3040





2. Light and Cheap, Netbooks Are Poised to Reshape PC Industry

SAN FRANCISCO — Get ready for the next stage in the personal computer revolution: ultrathin and dirt cheap. AT&T announced on Tuesday that customers in Atlanta could get a type of compact PC called a netbook for just $50 if they signed up for an Internet service plan — an offer the phone company may introduce elsewhere after a test period. This year, at least one wireless phone company in the United States will probably offer netbooks free with paid data plans, copying similar programs in Japan, according to industry experts.

But this revolution is not just about falling prices. Personal computers — and the companies that make their crucial components — are about to go through their biggest upheaval since the rise of the laptop. By the end of the year, consumers are likely to see laptops the size of thin paperback books that can run all day on a single charge and are equipped with touch screens or slide-out keyboards.

The industry is buzzing this week about these devices at a telecommunications conference in Las Vegas, and consumers will see the first machines on shelves as early as June, probably from the netbook pioneers Acer and Asustek.

“The era of a perfect Internet computer for $99 is coming this year,” said Jen-Hsun Huang, the chief executive of Nvidia, a maker of PC graphics chips that is trying to adapt to the new technological order. “The primary computer that we know of today is the basic PC, and it’s dying to be reinvented.”

An unexpected group of companies has emerged to help drive this transformation — firms like Qualcomm, Freescale Semiconductor and Samsung Electronics, which make cheap, power-saving chips used in cellphones and are now applying that expertise to PCs.

As in any revolution, the current rulers of the kingdom — Intel and Microsoft, which make the chips and software that run most PCs — face an unprecedented challenge to their dominance. Microsoft is particularly vulnerable, since many of the new netbooks use Linux software instead of Windows.

“A broad shift in the consumer market toward low-cost PCs would clearly put pressure on the revenues of nearly every player in the value chain, from component suppliers to retailers,” wrote A. M. Sacconaghi, a securities analyst with Sanford C. Bernstein & Company, in a report last month. “However, we believe the impact would be especially negative for Intel and Microsoft, who today enjoy near monopoly positions in their respective markets.”

So far, netbooks have appealed to a relatively small audience. Some of the devices feel more like toys or overgrown phones than full-featured computers. Still, they are the big success story in the PC industry, with sales predicted to double this year, even as overall PC sales fall 12 percent, according to the research firm Gartner. By the end of 2009, netbooks could account for close to 10 percent of the PC market, an astonishing rise in a short span.

Netbooks have trouble running demanding software like games and photo-editing programs. They cater instead to people who spend most of their time dealing with online services and want a cheap, light device they can use on the go. Most of the netbooks sold today run on an Intel chip called Atom, which is a lower-cost, lower-power version of the company’s standard laptop chips. And about 80 percent of netbooks run Windows XP, the older version of Microsoft’s flagship software.

The new breed of netbooks, built on cellphone innards, threatens to disrupt that oligopoly.

Based on an architecture called ARM, from ARM Holdings in Britain, cellphone chips consume far less power than Atom chips, and they combine many functions onto a single piece of silicon. At around $20, they cost computer makers less than an Atom chip with its associated components.

But the ARM chips come with a severe trade-off — they cannot run the major versions of Windows or its popular complementary software.

Netbook makers have turned to Linux, an open-source operating system that costs $3 instead of the $25 that Microsoft typically charges for Windows XP. They are also exploring the possibility of using the Android operating system from Google, originally designed for cellphones. (Companies like Acer, Dell and Hewlett-Packard already sell some Atom-based netbooks with Linux.)

The cellphone-chip makers argue that the ARM-Linux combination is just fine for a computer meant to handle e-mail, Facebook, streaming video from sites like YouTube and Hulu, and Web-based documents.

Freescale, for example, gave free netbooks to a group of 14- to 20-year-olds and watched what happened. “They would use it for Internet access when eating breakfast or on the couch, or bring it to class for taking notes,” said Glen Burchers, the director of consumer products marketing at Freescale.

Mr. Burchers said a number of companies already making netbooks would show a new round of machines using cellphone chips at the Computex trade show in Taipei, Taiwan, this June.

Qualcomm, the San Diego company that built an empire on chips for cellphones, recently introduced Snapdragon, a chip created for smartphones and ultralight computers. Already, the company has announced deals to sell the chip to 15 major device manufacturers, including LG, Acer, Samsung and Asustek. Qualcomm said some Snapdragon devices appearing this year would have screens of 10 to 12 inches.

Intel and Microsoft warn that consumers should remain skeptical about the performance of a computer that costs less than $300.

“When these things are sold, they need clear warnings labels about what they won’t be able to do,” said Sean M. Maloney, the chief sales and marketing officer at Intel. “It would be good to wait and play with one of these products before the industry gets carried away.”

Still, the rise of netbooks could hurt both companies. In its last quarter, Microsoft posted the first sales decline in its history for the PC version of Windows. It blamed netbooks for the drop. On average, Microsoft charges computer makers $73 for Windows Vista, the version of Windows used in desktop and high-powered laptop PCs. That is triple what it receives for a sale of Windows XP for a netbook.

For Intel, the Atom chips represent lower-profit products, which could turn into a major sore spot if consumers become comfortable with netbooks and start to view them as replacements for standard computers.

In his recent report, Mr. Sacconaghi speculated that 50 percent of consumers could get by with an Atom-based computer for their everyday tasks. PC makers like H.P., Acer and Dell, which face razor-thin profit margins selling laptops, could use the rising competition to place more price pressure on both Microsoft and Intel, Mr. Sacconaghi said.

The big winners in the rise of netbooks that use cellphone chips could be the cellphone carriers, which would have access to a whole new market: PC users.

Intel, meanwhile, expects cheap netbooks to expand the PC market to include hundreds of millions of children who have cellphones but no computers. The company has dozens of deals in the works with service providers to seize on this potential, Mr. Maloney said. As for the emerging competition, he said Intel would show off some surprising computer designs at Computex as well.

Mr. Huang of Nvidia said the PC industry sat at an inflection point. “Disruption will come in from the bottom and forever change the market.”



3. Netbooks, smart phones: Will the twain meet?

Jeff Brown and Howard Curtis


Conventional laptops and mobile phones remain worlds apart when it comes to cost, size and design metrics. Trends revealed in recent Portelligent teardowns of netbooks from Asustek and Dell, however, show a narrowing of the breach between that class of mini-notebook PCs and recent smart phones from Apple and HTC.

The gap has closed along a number of system cost and complexity vectors, including hardware bill-of-materials (BOM) cost, IC component count and IC die area. Nevertheless, for now, persistent differences in power consumption, form factor and software are keeping the two device classes out of direct competition with each other.

The Asustek Eee PC 2G was the first Intel architecture-based portable personal computer analyzed by Portelligent that demonstrated a total hardware BOM cost of less than $200--previously only true of cellular phones.

Netbooks like Asustek's (center) still differ in form factor and user expectations from smart phones like this HTC-built model.


By making use of a low-cost Centrino chip set from Intel; replacing the hard drive with 2 Gbytes of NAND memory; and providing a 7-inch, 800 x 480 resolution display, Asustek achieved a cost to manufacture that enabled a retail price point below $400. On the heels of Asustek's success with the Eee PC, most of the major PC manufacturers have launched their own netbook PC models built around Intel's Atom chip set.

Netbook PCs are miniature versions of notebooks that keep cost to a minimum. Contributing to the declining cost trends observed in netbook PCs, the nonmemory IC component count and die area seen in the Asustek Eee PC are now below those observed in ultrahigh-end smart phones, and well below the figures seen in notebook PCs.

Smart phones are headed in the opposite direction: The expanding capabilities of ultrahigh-end handsets are driving the devices' cost to manufacture above $150 and often closer to $200, despite reductions in component costs.

While the smart phone and the netbook are converging on the dimensions of system complexity and cost, at least two factors keep them relegated to separate market segments for now: form factor and power consumption.

Netbook PCs demonstrate a 50 percent smaller footprint than full-size notebooks. Further reductions in size would impose sacrifices in the usability of the keyboard and a cramped display--two key differentiators from smart phones.

As for smart phones, consumers expect to be able to place a phone handset unobtrusively in a pocket. At 6 cm x 12 cm, the Apple iPhone and the HTC Google Phone push the upper limit on acceptable cell phone size.

Click on image to enlarge.

The reductions in component count and die area from those of conventional laptops, combined with the movement to a solid-state disk drive and smaller display, have enabled the netbook PC to improve power consumption by more than 65 percent over previous generations of notebooks. Even with those power efficiency improvements, however, netbooks still require as much as 10 times the power for the same activity compared with smart phones from Apple and HTC.

Netbooks and smart phones occupy adjacent niches, but they will not truly compete head-to-head until the form- factor differential and the discrepancies in power consumption are reduced or eliminated.

Recent announcements of phones with built-in projectors, along with lower-power netbook platforms from Intel, Nvidia, and Qualcomm, may further blur the lines between smart phones and netbooks in the coming year.



4. Lighter on Laps and Wallets


April 15, 2009

Maurice Tsai/Bloomberg News A shopper looks at the Acer Aspire One PC.

Laptops on airplanes are hardly an unusual sight these days, but when Heather Poole pulled out her computer on a recent flight from New York to Los Angeles, she got a surprising reaction from the flight attendants serving drinks.

“They stopped service — they wanted to hold it, look at it,” said Ms. Poole, 38, a flight attendant herself, who also writes for the travel Web site Gadling.com.

The computer attracting all this attention? An Acer Aspire One PC, a tiny laptop that weighs just 2.2 pounds and is one of the most popular designs in the emerging category of netbooks, portable computers whose small size is matched only by their low prices. With powerful processors, 8- to 10-inch screens and compact keyboards, they typically cost well under $500; some go for as little as $200. Last year, an estimated 14 million were sold, according to DisplaySearch, a market research firm.

For frugal travelers, netbooks are a godsend. In one minuscule package, you can carry a nearly full-power computer, often without the aid of a power cord, since many netbooks come with long-lasting multicell batteries.

The MSI Wind.

“When you can just charge up the battery, leave the charger behind and know that you have five or six hours of working time, that’s absolutely great,” said Guy Munsch, a partner in Zen Tara Tea, an organic tea company based in Bethesda, Md., who’s carried his year-old MSI Wind to tea estates in China and Thailand.

Along the way, though, he’s also learned his netbook’s limitations.

“We do a lot of photography, so graphically there’s limitations to working with the screen,” he said. Then there was the problem of peripheral devices: the bricklike power supply, an external hard drive and so on. The solution, he said, is “self-editing.”

For Joel Johnson, the editor of the Boing Boing Gadgets blog, which has covered the netbook phenomenon obsessively, the low price of his new Dell Inspiron Mini 9 ($200) assuaged one of his great worries on business trips. “I always have that fear in the back of my mind that I’m going to break my laptop — and break my sole computer,” he said. “I wanted something that is so cheap that I could throw it in a bag, and if it broke, I could just shrug my shoulders and go, ‘Oh, well.’ ”

Mr. Johnson added that netbooks are about to get even cheaper, as producers add 3G mobile functionality and carriers like AT&T and Verizon offer them at huge discounts (and possibly even free) with a two-year contract. “It’s kind of like getting a subsidized cellphone,” he said. “Yeah, you get it cheap,” but you still have a monthly bill to contend with.

This Frugal Traveler resisted buying a netbook for a long time. I’m a long-time Mac user, and most netbooks run Windows or, occasionally, Linux. The MacBook Air, Apple’s small-sized option, meanwhile, starts at $1,799. But last fall, along with the explosion of netbook popularity came a wave of software modifications that let many of them run Apple’s OS X. When Boing Boing Gadgets published a chart showing which models were most compatible, I took the plunge and ordered the MSI Wind. It was $447.53, including extra memory and shipping. (The price has since dropped by $50.) Less than an hour after I opened the box, I had OS X loaded and running.

In the last four months, the MSI has been at my side constantly. Yes, the keyboard is small, but so are my fingers. I like knowing that I can stay connected, get work done and not be out thousands of dollars if I forget it in a seatback pocket. And, honestly, I love the envious looks in cafes and airport security lines — but maybe they’re just ogling the sticker I slapped on the lid: the white Apple label that came with my iPhone.

Carrying a nifty-looking laptop isn’t just vanity. It can prove life-changing, as Ms. Poole, the flight attendant, well knows. Once, during a flight, she flirted with a passenger just because he was using a cool computer. Seven years later, he’s her husband.