[LINK] netbooks

[stephen at melbpc.org.au]

By ASHLEE VANCE and MATT RICHTEL
nytimes.com  Published, April 2, 2009 


SAN FRANCISCO — Get ready for the next stage in the personal computer 
revolution: ultrathin and 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 US $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 Win 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.. 


Cheers, Paul, Glen, Bryn, Bill, David and all ..

Stephen


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