Does The World Need Netbooks and Nettops?

Ultra low-cost personal computers (ULCPCs) have been gaining market share as numerous consumers decided to cut their spending on primary or additional personal computers and wanted to have rather miniature and simple devices. However, as a recent poll of X-bit labs readers showed, 60% of technology professionals and enthusiasts consider netbooks and nettops obsolete. We decided to ask AMD, Intel and Nvidia whether they saw prosperous future for those product types.

by Anton Shilov
11/26/2009 | 08:12 PM


Despite of popularity of netbooks and even cannibalization of traditional mobile PC market by inexpensive netbooks, a recent survey of our readers showed that the vast majority of information technology professionals and enthusiasts do not think that it makes sense to acquire such devices. Is it the beginning of the end for netbooks, nettops and smartbooks, or those ULCPCs  have bright future as supplementary personal computers in well-developed countries or as solutions for first-time PC buyers in developing countries? We decided to find this out with three top technology companies that are involved into development of chips for netbooks, nettops and ULCPCs in general.


But before we proceed with opinions of Advanced Micro Devices, Intel Corp. and Nvidia Corp., let’s take a look what readers of X-bit labs have said.

As we see, over 60% of respondents do not believe that ULCPCs make any sense. Still, 21% of our readers own a netbook and 12.5% are planning to buy a multimedia netbook with either Nvidia GeForce 9400M/Ion chipset or based on Intel Pineview platform that also comes with improved graphics and hardware high-definition video decoding, or powered by AMD’s chips and core-logic sets.

Virtually no one owns a nettop or a smartbook and just about 2% of respondents would buy either of them. This could be explained rather easily: people want performance on their desks and smartbooks, which do not run Windows, are considered as companions for smartphones, something, which not all smartphone users understand as they already own ultra-thin business notebooks for that purpose.

In fact, before running ULCPC-related poll, we ran a survey about preferred mobile PC form-factors not so long ago. Here are the results:

It appears that the most popular mobile form-factors are 12”, 13” and 15”. 10” and 17” tend to be in demand as well, but they are still below the more popular options. What is noteworthy is that there are only 13.6% of users, who would like to own a mobile computer with screen diagonal below traditional 12” (for an ultra-small machine). At the same time, there are 23% of those, who would like to have a traditional ultra-thin 12” or 13” mobile PC.

The fact that only 5% want to have a 14” notebook is also explainable: you can easily have a comfort of a traditional 14” laptop with a wide-screen 13.3” ultra-slim mobile computer. However, when the vast majority of buyers arrive to a store and see the price difference between them, they may change their minds in favour of a slightly larger option.

All-in-all, 41.2% of respondents prefer to have traditional notebooks (12” – 15”) and 27.1% would like to own either something ultra-small (e.g., a netbook – 13.6%) or bulky and powerful (e.g., a gaming/workstation notebook – 13.5%).

It appears that the three companies that develop chips for various ultra-small or ultra-cheap personal computers – AMD, Intel, Nvidia – tend to say that there are people who need them. So, today we are talking about who needs those devices and for what purpose.

Netbooks: Just for the Internet?

Intel Corp. is indisputably the company that ignited the era of netbooks with its Atom processors aimed at ultra-mobile applications. The Atom chips failed to become popular in mobile Internet devices (MIDs), however, netbook is the fastest growing PC category.

“Netbooks are a pretty-well established category and clearly still a much sought after product. You should go talk to some of the analysts on estimated numbers, but still forecasted in the tens of millions of units over the next several years,” said Bill Calder, a spokesperson for Intel Corp.

Netbooks are popular, but netbook makers are blurring the lines between ultra-thin notebooks and netbooks by increasing screen sizes of netbooks and installing lower-end microprocessors into ultra-low voltage platforms.

 “Admittedly, consumers have more choices today, and many may choose to buy-up which is fine. Keep in mind that netbooks are really just for the Internet, mostly a companion device, and should not be confused with say, ULV machines that offer more features and better performance. So, while there is some blurring of the lines in terms of size and shape, they really are distinct categories,” said Mr. Calder.

Acer Aspire One: Intel Atom, Intel built-in graphics. Probably, the world's most popular netbook

But are netbooks just for the Internet? Nvidia says clear “no”: its well-known GeForce 9400M core-logic (also known as Ion) with an advanced graphics core can do much more than just display images, for example, it can decode high-definition video, something that Intel’s own netbook platforms lack at the moment.

“Many consumers have been disappointed with netbooks, for a variety of reasons. One of the main issues consumers have is that they expected their netbook to perform like a full-sized notebook. As we all know, they disappoint in this regard due primarily to their underpowered graphics. Nvidia and our partners have been working hard to address this with Ion graphics. The new Ion-based netbooks from manufacturers like HP have been lauded for delivering notebook-like performance at a netbook price-point, with more than 5 hours of battery life to boot,” said Matt Wuebbling, notebook product manager at Nvidia.

Asus Eee PC  1201N: Intel  dual-core Atom, Nvidia GeForce 9400M/Ion core-logic. Probably, the world's most powerful netbook

In fact, precisely selecting the right mobile computing device is very important on the first place.

“Selecting the right mobile computing device means juggling the balance of price, portability and performance. I contend that if you sacrifice too much performance for price and portability and you end can up with a solution that is not acceptable for anything other than a narrow-use Web tool for travel. But that might be what you need; if so, it's likely in addition to your regular PC or laptop uses,” said Damon Muzny, a spokesperson for AMD.

Intel’s own next-generation netbook platform based on the future Atom processor features considerably better graphics technology as well as hardware-based high-definition video decoding. So, netbooks are not just for the Internet, as Intel’s product roadmap admits.

“We believe that Ion goes a long way to address the deficiencies in the netbook category. While we understand that some consumers are not interested in netbooks, a significant percentage of respondents to your poll indicated interest in a multimedia netbook. This is a vote of interest in netbooks with greater graphics capabilities, like Nvidia Ion offers. Apparently a lot of independent parties agree, as indicated in the numerous awards the Ion earned this year,” added Mr. Wuebbling.

Acer Ferrari One: AMD Athlon Neo, ATI Radeon HD 3000 graphics. Probably, the world's most stylish netbook

Although one of the world’s most advanced – and, perhaps, the most desired – netbook, the Acer Ferrari One, is powered by an AMD microprocessor, the chipmaker still does not think that netbooks are really important as a product category. This may be a correct perception since netbooks are considered as generally underpowered devices and calling an inexpensive mobile computer with premium features a netbook may well harm its sales among target audience.

“The desire to have real computing power in smaller, lighter and less expensive notebooks was the reason for the HP dv2 ultrathin notebook and similar SKUs. They are thin, light and compact at an exciting price, but they do not make the painful sacrifices regarding PC capabilities as netbooks do. There are new AMD-based notebooks coming out this holiday season (like HP's dv3) with new hardware and better battery life,” said Mr. Muzny.

Nettops: An Opportunity, or a Dead End?

While netbooks have captured their market niche, nettops still have to gain popularity. At present nothing seems to help.

“Entry level desktop PCs or nettops or whatever you want to call them, while not as popular as netbooks, nor as widespread, are still an opportunity. There is tremendous potential particularly in emerging market segments. Not clear from your survey whether you have contemplated market potential and acceptance in China, Latin America, and other countries where first time buyers are looking for simple Internet devices at affordable price points. There is also a new crop of small form-factor desktop machines, All-in-Ones based on the next generation Atom platform that I think are going to be very compelling for people who just want entry-level desktop performance, with slightly more capability than a standard netbook (light multi-tasking, etc),” explained Mr. Calder.

Acer Aspire Revo: Intel Atom, Nvidia GeForce 9400M/Ion

Despite of rather strange attitude towards netbooks, AMD, the arch-rival of Intel, seems to be quite interested in nettops. This may be explained by the fact that the company’s desktop lineup is by far much more competitive than the family of mobile microprocessors.

“AMD is expanding our low-wattage/low-power desktop lineup to enable some exciting new SKUs from our partners that includes smaller form factors and all-in-one designs which are coming soon.  It's the combination of efficient, but not under-powered, CPU and IGP chipset solutions that enables mainstream solutions with multi-core performance and 1080p visuals in compact SKUs,” explained Mr. Muzny from AMD.

For Nvidia, which does not make central processing units, nettops represent the same opportunity as netbooks: to sell its highly-integrated GeForce 9400M core-logic, which is not only a low-power device, but also the only single-chip core-logic for AGTL+ processors on the market.

“What is important to us is that PC users have a good experience. Whether consumers opt for a netbook, notebook or nettop, we recommend they have a good graphics processor to provide the best visual experience,” said Mr. Wuebbling from Nvidia.

Asrock nettop: Intel dual-core Atom, Nvidia GeForce 9400M/Ion core-logic, Blu-ray disc drive

“I might suggest that certain new capabilities are important for netbooks/nettops to move to the next level, but then someone else might say, ‘no, that capability takes you out of the netbook/nettop space altogether’. If you give them rich multimedia capabilities and more power, are they still netbooks or are they thin and light notebooks? Does it even matter what they're called as long as customers know what they want and how to find that level of product?” asked Mr. Muzny.

ULCPCs: Not Just for Economic Downturn

The first modern netbook produced was Asus Eee PC back in August ’07 and it took a year and the global economic recession for the category to become significant. But are the ULCPCs just a temporary solution during the slowdown? It seems like silicon developers do not think so.

“These affordable devices really represent a new category of computing and aren’t just a flash in the pan for the recession. People have shown they want, and need, simple Internet-centric devices and there is still room to grow the market especially in emerging markets,” explained Bill Calder from Intel.

OLPC XO with AMD Geode inside. The world's most-known ultra low-cost PC

Anyway, with advanced graphics or not, personal computers – whether they are netbooks, nettops or smartbooks – based on Intel Atom hardly represent good performers for demanding applications. In fact, some industry insiders believe that the main target audience for ULCPCs are women and youth, people who are not fixated on productivity, but lead an active life with a lot of communications (including the various social networks) and in need of advanced multimedia features (in order to share photo albums, videos, etc). For those purposes, one hardly needs an expensive personal computer, but proper feature-set (e.g., sufficient storage and performing graphics core) is recommended.

“The overall trend for netbooks continues to suggest strong growth in the category. Gartner estimates that 30-40 million netbooks will be sold next year alone. In the US, the Consumer Electronics Association shows that netbooks at #9 on the wish lists for teens,” said Matt Wuebbling from Nvidia.

Another interesting prospect for ULCPCs are education facilities, especially in emerging countries. Being relatively inexpensive and very efficient in terms of support for multimedia features, personal computers powered by chipsets like GeForce 9400M can actually revolutionize the experience of education.

“India already has a province in which children learn and do homework on these devices. And this is only the beginning,” said Irina Shekhovtsova, a spokeswoman for Nvidia.

Besides education, there are emerging retail PC markets, where every dollar counts and where ULCPCs can really become popular.

“I think you have to caveat the survey data and say, this is only in mature markets and does not contemplate attitudes/responses from some other potentially significant markets, i.e. China, India, Latin America. Places were low-cost computing is far more relevant perhaps,” said Mr. Calder.

Actually, low-cost personal computers were given a green light at the time when IBM allowed others use its IBM PC platform and the “IBM PC-compatible term emerged”, sometime over 20 years ago.

“Technically, low-cost PCs have been around for at least 10 years or more, why we did Celeron in the first place, and the category is going to continue to evolve with Atom fueling a new crop of innovative small designs. Of course, Celeron is better performer, but keep in mind one of the other benefits of Atom is low power, very very small die and small package, our smallest chip we make, which enables some very cool small form-factor and fanless designs,” noted the spokesperson for Intel.

There is yet another important market for ULCPCs: the extra computers. Many of us already own spare mobile phones, mice, keyboards, etc. for “just in case scenario”. Going forward, the consumers are likely to buy additional computers for specific purposes, e.g., to read recipes from the Internet while on the kitchen. What is important for PC manufacturers is to create the right balance between the price, performance, feature-set and price of such “extra” devices.

“I do see all-in-one PCs being the perfect “extra” desktop computer for folks who have a main PC but want something that isn't underpowered as a satellite system somewhere in the house. And I do see folks wanting thinner and lighter notebooks. The question is how much they are willing to sacrifice to get the right balance,” said Damon Muzny from AMD.


Ultra low-cost personal computers as well as ultra low-power computers are indisputably directions to watch. The question is really in the balance between capabilities, performance, battery life and price.

For the time being, netbooks seem to be a rather decent solution for someone, who does not want to spend a fortune on a high-end ultra-thin laptop or a rather disputable CULV (consumer ultra low-voltage) machine. One should understand though that in default configuration such a netbook would work for a couple of hours, whereas with advanced battery it will weigh more than a premium thin-and-light machine.

Advanced multimedia capabilities and high-quality screens are definitely becoming a must as netbooks are gaining popularity. The facts that Nvidia has already released a high-definition Ion/GeForce 9400M, AMD is offering appropriate processors and chipsets as well as Intel is about to launch its high-def core-logic for Atom are just proofs of that.

Nettops seem to be another story. People want performance out of their desktop PCs, which is something that Atom processors simply do not provide. In fact, even when paired with Nvidia’s chipsets with DirectX 10 and high-def video support, Atom-based nettops have turned to be popular.

As a result, dual-core low-power offerings from AMD along with its advanced chipsets may have a good chance in both nettops and all-in-one systems. Obviously, Nvidia GeForce 9400M/Ion along with Intel Celeron or Pentium processors are nice candidates as well.

Was the vox populi right at this time? Yes! Hardly anybody wants to have underperforming something with 9” screen, low-end processor, old graphics core and low battery life. Netbooks and nettops have to improve dramatically to become popular in the long term. At least, among our readers. 

All-in-all, just choose your PC strictly in accordance with your needs and you will never become disappointed.