Netbooks Aren’t Bad, Just Misunderstood

Asus Eee PC Netbook
The Asus Eee PC netbook
Source: Asus

Sales of netbooks have been one bright spot for the PC industry during the past year. So why are many users returning them?

It’s hard to pinpoint the rates at which netbooks are being returned to the stores and e-tailers where they’re purchased. But many industry observers agree: Many are seeing higher-than-usual rates of return. And many are blaming the retailers’ marketing.

Industry analyst Jon Peddie, president of Jon Peddie Associates, said retailers’ messaging have left netbook customers feeling like the product doesn’t live up to its promises. He said ads for netbooks make them look like low-cost notebooks, when that’s not what a netbook is supposed to be at all.

“The whole idea of a netbook is it’s your third computer,” Peddie told “The original idea of the netbook was this would be the ‘tweeny’ — in between a mobile phone and a laptop. This is the thing that would be better than the mobile phone because it would have a better screen and full keyboard and Internet access and do lightweight work with OpenOffice or something like that.”

Netbooks have made a big splash in the market recently with their low-cost price — as low as $299 for the Asus Eee PC – while offering at least some basic computing capabilities. With laptops growing larger, thanks to widescreen monitors and their increasing popularity as a desktop replacement, a netbook is meant to be something you can carry in a purse, briefcase or book bag.

A big hit from tiny PCs

The advent of the netbook came about thanks to some breakthroughs in x86 processor technology. The Centaur processor from VIA Technologies and Atom processor from Intel (NASDAQ: INTC) brought x86 to extremely small form factors while drawing less than 10 watts of power.

And they have been a huge hit. Intel can’t make and qualify Atom chips fast enough. By combining netbooks with notebooks, iSuppli said mobile computing surpassed desktop sales for the first time last quarter.

But these devices have a high boomerang rate, too: They go out, and come right back. If anyone did anything wrong, it was the retailers in the presentation of the device, Peddie said.

“People realized they didn’t have the range of apps, they have a small screen size and it led to a poor experience. But they were never meant as a replacement for low-cost, thin and light notebooks,” Peddie said.

Ross Rubin, director of industry analysis for NPD Group, agreed that netbooks’ high rate of return has been due to dissatisfaction over their intended purpose.

“Certainly manufacturers aren’t intending for these products to serve as a replacement for notebooks with more powerful processors with larger screens,” he told

[cob:Special_Report]Rubin added that another reason for the returns is the ergonomics of the smaller netbook, which usually has an eight to 10-inch screen instead of the 14- or 15-inch minimum for laptops and a corresponding small keyboard. After a few hours of Web surfing, that gets uncomfortable.

A secondary problem is that netbooks don’t have the right audience yet, he said.

“There’s certainly a market of consumers and business people for whom an inexpensive, lightweight device can be used effectively by someone as a second computer,” he said. “It’s difficult for [netbooks] to fulfill its true promise without wireless broadband.”

He added that mobile broadband would give the netbook viability in the same way Wi-Fi really validated the notebook. “Connectivity is going to be key to using it outside of a place where you might enjoy a longer usage session, like a coffee shop,” he added.

News Around the Web