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What's obvious about netbooks

Wednesday, October 14, 2009 by Dave Winer.

Some people in the tech industry believe netbooks are a mistake that will be corrected any day now. Problem is they've been saying that for hundreds of days while the netbook market keeps growing, as the market for more expensive portables stagnates. The trend won't reverse because netbooks represent a far more fundamental shift than they recognize. Far more significant than I've realized until just the other day.  

12/17/08: What is a Netbook? 

At one level, a netbook is just a new product, something between a notebook and an iPhone. It fits easily into a briefcase or knapsack, has a keyboard and screen that while not exactly spacious, are functional.  

The iPhone is a compromise, a good one because of its supreme portability (it fits in a pocket). But netbooks are a good compromise too. 

An aside, I know some people use iPhones for their networking. Scoble is my prime example. I can't get him to use my software these days because it runs in a desktop style web browser. Of course what he's doing is a reasonable choice. But it's never worked for me because communicating on an iPhone is too slow. Not just the typing, not just the cramped keyboard, but the actual networking. I had an interesting experience the other day on my mother's new FIOS home network, all of a sudden I could use the iPhone the way Scoble does. For some reason it doesn't work very well on my network at home, and the net connection from AT&T is infinitely too slow to be usable. So it could be that my iPhone experience is much worse than most people's.  

As a product a netbook is less expensive, more portable, and has longer battery life than a notebook. 

It has a bigger keyboard, bigger screen and is a better reading and writing tool than an iPhone.  

It's in the middle -- and there is a middle -- a product between an iPhone and notebooks 

But the netbook is not just a new product. It exposes something pretty ugly about the computer industry. They've been controlling prices. There must have been price collusion before netbooks came out. It's clearly possible to build notebooks for much less than they manufacturers are charging.  

That's a matter for the Federal Trade Commission to look into, but even that is not what's going on with netbooks. The truly significant thing is this -- the users took over. 

Let me say that again: The users took over. 

I always say this is the lesson of the tech industry, but the people in the tech industry never believe it, but this is the loop. In the late 70s and early 80s the minicomputer and mainframe guys said the same kinds of things about Apple IIs and IBM PCs that Michael Dell is saying about netbooks. It happens over and over again, I've recited the loops so many times that every reader of this column can recite them from memory. All that has to be said is that it happened again. 

Once out, the genie never goes back in the bottle. 

This should serve as a lesson to the architects at Twitter and Facebook. The day will come when your users figure out that they can do what you do without the costs you impose. Better to prepare for that day, factor it into your economics, than be surprised by it as Michael Dell appears to have been. He's complaining about netbooks probably because his expense structure can't sustain the business. He's a leading vendor of netbooks, yet is selling against them. This means only one thing, and it's kind of obvious -- he's losing money on each sale. He can't afford to be in the business. Which means he can't afford to be in business at all. 

Windows 7 may be nice, I don't know and I don't care. I like my XP-based netbook just fine with its 10 inch screen, 160GB hard drive and 8-hour battery life. My computer cost $350. I'm not a likely customer for an upsell. Those are the new economics, like it or not.