Netbook Evangelist | The blog with information resources for netbooks

Kohjinsha is about to launch a significant overhaul of its convertible tablet netbook that will bring it to the forefront in terms of features, a leak shows. The SK3 will have 802.11n Wi-Fi and, to draw on the better wireless, both outward- and inward-facing cameras for video chats or photography. It’s also one of the first tablet netbooks to support Windows 7; what this involves isn’t known by UMPC Portal, but it may involve either tighter integration with the touch elements of the Microsoft OS or else a more finger-ready screen.

The resulting system would still be one of the smaller PCs of its type with a 7-inch swiveling LCD, a 1.33GHz Atom processor and 1GB of RAM. Its predecessor the SC3 has a 60GB hard drive, but it’s uncertain if this will be upgraded with a larger rotating disk or replaced entirely in favor of an SSD. A formal announcement is expected sometime this week and will officially limit sales to Japan, although importers like Dynamism may bring the SK3 to the US.

Netbook vendors are considering keeping their Intel Atom N270 and N280-based netbooks using Windows XP and will not offer upgrades to Windows 7 due to increasing costs and low consumer demand, according to industry sources.

The current price of Windows XP OEM version is only around US$25-30, but the latest quotes from Microsoft for the netbook version of Windows 7 is around US$45-55 and therefore first-tier vendors are unable to transfer the cost to the netbooks’ sales price due to the fierce competition.

The first-tier notebook vendors are still negotiating with Microsoft hoping to bring the price down.

Since most consumers think Windows XP is enough to handle their needs in a netbook, the Upgrade to Windows 7 Program will provide less incentive to attract consumers to purchase netbooks.

Currently, most netbook vendors are focusing on only adopting Windows 7 in their next generation Atom N450-based netbooks, while some vendors are considering offer upgrades for their N280-based products.

In additional news, Intel plans to announce the single-core Atom D410 and dual-core Atom D510 for nettops in October 2009 replacing the current Atom 230 and 330. Atom 230 and 330 will be phased out in the first quarter of 2010.

While no word had been shared about the potential of an Android netbook from Dell, a hastily released press release from a company called Bsquare has gone ahead and confirmed it (presumably, without Dell’s permission).

The press release (which is posted after the break) states “Bsquare Corporation (BSQR – News), the leading software solutions provider to the global embedded device community, today announced it is porting Adobe’s Flash Lite 3.17 technology onto Dell Netbooks running Google’s Android platform.”

Bsquare had attempted to remove the information hoping that no one would be the wiser, but the quick eyes of the Internet don’t miss a thing – including rogue press releases.

While the existence of an Android based netbook has been confirmed, no additional details have been released.

Despite endless speculation and prediction-mongering that Windows 7 will be released this fall, Microsoft has stubbornly held on to the official suggestion that Win7 won’t ship until January 2010.

But now PC manufacturer Acer — in what must be a wild violation of its nondisclosure agreement with Microsoft — is saying not only that Windows 7 isn’t destined for a January release, but that it will arrive officially this October. October 23, to be exact.

That date makes a whole lot of sense for Microsoft, as it gets Windows 7 on shelves and preloaded on new PCs before the holiday season gets underway — before Halloween, even — and gives consumers enough time to be bombarded with promotion before Black Friday arrives five weeks later. It’s a smarter release window, in my opinion, than waiting until late November or even December, since it also gives consumers the chance to get comfortable with the OS (and hopefully read some glowing reviews) before it’s time to make a purchase.

An October release also avoids the need for the complicated upgrade offers that Microsoft often bundles with machines that are sold right before a new OS comes out. Those upgrades, in part, got Microsoft slapped with a class-action lawsuit when it let vendors put “Windows Vista Capable” stickers on machines sold during the 2006 holiday season in advance of the release of Vista in early 2007. Many consumers found they had trouble with those upgrades (and discovered that the computers weren’t as “capable” as they’d been led to believe) and sued for damages — though currently that case has lost its class-action status.

Why won’t Microsoft fess up about the Windows 7 release date? Several reasons: First, it doesn’t want you to wait to buy a new machine or a copy of Vista, and it knows from history that announcing the release date for the next generation of a product too early can kill revenues until that date arrives. The other reason: October 23 is a long way off, and anything can happen in the next six months, and history again teaches us that Microsoft never meets its release date schedules.

Microsoft posted a quarterly drop in sales and profits yesterday, which is interesting news all by itself, considering the mammoth scale of Microsoft’s PC dominance. But hidden in the data is the suggestion that one of the causes of the financial stutter is the rocket-powered growth of the netbook market.

Specifically, revenues of the Windows Client division of the company fell 16% in the last calendar quarter compared to the year-on-year figure. That’s of course a figure that’ll be affected by the global slowdown–as people buy less computers, that equates to fewer Windows OS sales. But Microsoft itself has suggested that it’s due in part to the netbook revolution, with the company’s general manager of investor relations, Bill Koefoed, suggesting that around 10% of all PC sales in the quarter were netbooks.

Of course this isn’t because the new class of PC only runs Linux-based operating systems–there are many sold that carry Windows XP aboard, and Microsoft’s even seen fit to extend the lifespan of that aging OS to support the netbook craze. But Windows XP simply doesn’t make Microsoft as much money as its higher-end, higher-margin operating systems like XP Professional, Vista Ultimate, and Vista Business, which is why the financial reports also show a drop in the “premium mix,” a figure that measures the percentage of Windows sales from the high-end products: it went from 76% in the same quarter last year to just 62% in this year’s quarter.

The upshot of this news is actually pretty significant for Microsoft. Netbooks are clearly here to stay, and their rapid rise in popularity points to a consumer desire for cheap, easy-to-use machines. If Microsoft is to successfully capture some of its revenue back, it absolutely has to get its next-gen OS, Windows 7, selling successfully on the netbook. Will it be forced to reconsider the seemingly crazy “three apps running” limit in Windows 7 Starter for netbooks?

And then there’s Apple. Its recent finances have actually bucked the global downturn rather well, aided not insignificantly by the iPhone. During its press event, Apple’s leadership was questioned again about the likelihood of an Apple netbook, and their response was to roundly condemn the machines as inadequate. Can Apple really afford to ignore a growing new PC market, and one that’s now powerful enough to damage its biggest rival? I’d argue it definitely has to take note. Maybe we can read between acting CEO Tim Cooke’s words “When I’m looking at what’s sold in the Netbook market, I see cramped keyboards, junky hardware, very small screen, bad software. Not a consumer experience that we would put the Mac brand on,” and speculate that there really is something slightly different, but aimed at the same market, on the way?

Word on the street is that Apple is building a netbook and that the device is being called the “iPod Touch HD”. According to these latest rumors, the device is a lot like the iPod Touch, except with a much larger screen.

If you can believe the hype, the new device is expected to start shipping in the third quarter of this year. It isn’t a complete surprise if true. Netbooks are uber popular and so it would make sense for Apple to get in on the action.

Of course it could just all be BS and we might really have a new iPod on the way.

People have been speculating about Google getting into the desktop business ever since Good OS, an Ubuntu-based Linux built around online Google applications showed up in 2007. Then, the rumor-mill really got churning when it was shown that Google mobile operating system, Android, would work just fine as a desktop operating system. Just because something can be done, though, doesn’t mean a company actually going to do it though. On March 3rd, though, Google CEO Eric Schmidt said, “What’s particularly interesting about netbooks is the price point. Eventually, it will make sense for operators and so forth to subsidize the use of netbooks so they can make services revenue and advertising revenue on the consumption. That’s another new model that’s coming.”

Making money from online advertising. Hmm… Now what company, with a name that starts with ‘G’ and ends with ‘e,’ do we know that’s the absolute tip-top at making money from online advertising? Could it be Google!? I think so.

The idea of selling netbooks cheaply with a service contract is already being tried. Dell and AT&T offered a Dell Mini 9 for $99 with an AT&T Data Connect contract. I have no doubt you’ll see similar mobile phone like discount netbook pricing from other PC companies and telecoms soon. Look for these offers to start showing up everywhere later this year or early next year, as high-speed WiMAX networking starts to come into its own.

It makes perfect business sense for Google to jump into this business. Netbooks continue to be the one bright spot in computer sales and Google already has a Linux that will work on them. Google, of course, also has many online applications that work perfectly on a netbook. Making it even more attractive, Google is making it possible to use their applications, such as GMail, without a Internet connection.

Now take all this, combine it with putting data and applications on the cloud and Google’s online advertising savvy, and I see a business model that, even in this grim economy, can’t help but make money.

We’ve gone from pure speculation, to speculation based on facts, and now Google’s CEO is talking about how much sense this kind of idea makes. I hereby predict that we’ll see the first netbooks with an official Google Linux desktop on them by the second half of this year. It will happen that quickly because Google won’t want to give Microsoft a chance to regroup with Windows 7 from its Vista disaster.

In 2010, the big desktop operating system battle will be between Apple, on the high-end, Google and the other Linuxes on the netbook and other low-priced systems, and Windows getting squeezed in the middle. If I were a betting man, I’d put good money on it.

Source: http://blogs.computerworld.com/google_ceo_hints_google_linux_netbooks_may_be_coming

According to Forbes, we may see LG’s first netbook, the X110, in US stores “before July”. LG is apparently interested in exploring the space between laptops and smart phones and “experimenting to see which products fit our customers’ unmet needs.” I’m not convinced that a netbook — even a 3G enabled one — is dead center between a notebook and a smart phone. Mobile Internet Devices seem to be closer to that ideal, though it could be said that MIDs exist in the space between netbooks and smart phones. LG is, of course, all over that, too:

The company is also rushing to build smaller mobile Internet devices known as MIDs, or mobile Internet devices. In Barcelona last month, LG announced that it is collaborating on a range of MIDs with chip maker Intel. Those devices are scheduled for 2010.

I’m definitely interested in seeing what LG’s X110 has under the hood. They make great phones… and monitors, TVs, microwaves, washers, dryers…

Source: http://blog.laptopmag.com/lg-x110-netbook-to-hit-us-shores-before-july

It wouldn’t cannibalize higher-priced laptops if done right

February 23, 2009 (Computerworld) With a $599 netbook, Apple Inc. could move into a fast-growing market without cannibalizing existing sales and still make the profit margin investors have come to expect, a financial analyst argued today.

“Despite management’s commentary that it’s not interested in the netbook market, the key to Apple’s model is continued [share] penetration,” said Brian Marshall, an analyst at Broadpoint AmTech.

“Currently, Apple has about 3.5% of the computer market. But I see that tapering off this year, for two reasons,” he said. “One, it will be difficult to stay at that share in this downturn with a high-priced product. And two, the company has indicated it has no interest in playing in the fastest-growing segment.”

Although Apple may resist moving into the netbook market — loosely defined as small, lightweight and lower-priced notebooks — Marshall spelled out how the company could actually craft a premium-priced netbook that wouldn’t eat into sales of the more expensive MacBook line.

“Investors, and Apple, too, are concerned about the possibility of a netbook being cannibalistic, but I think that [a netbook] at $599 is not a cannibalistic product if it’s positioned properly,” said Marshall.

He envisions a device boasting a 10.1-in. screen and a 16GB solid-state drive, perhaps powered by an ARM processor designed by P.A. Semi, the California chip designer Apple acquired last year for a reported $278 million.

Marshall pointed to Hewlett-Packard’s Mini 1000 netbook as a starting point for comparisons to what Apple might build. When configured with a 10.1-in. display and 16GB of hard drive space, the Mini 1000 XP costs about $399.

“If you assume a 50% premium for Apple’s netbook, it would be priced around $599,” said Marshall, noting, as have other analysts, that that price is higher than what CEO Steve Jobs said last year was too low a price point. “We don’t know how to make a $500 computer that’s not a piece of junk,” Jobs said last year during a conference call with Wall Street analysts.

“At that price, it’s a material difference from there to the $999 of the least-expensive MacBook,” Marshall said.

Apple’s lowest-priced notebook is the $999 MacBook holdover from the previous generation; the new “unibody” MacBooks introduced last October start at $1,299.

Using his own cost-of-goods work-up, Marshall showed how Apple could sell a netbook at $599 and still make a profit of 35% to 40% on each unit, a range that matches the 35% margin Apple had in the quarter that ended in December.

“But I don’t think Apple will want to be in the space just to make another netbook,” said Marshall. Instead, he expects that the company would offer technologies and software that others don’t. “I definitely see a place for some of their technology, in the form of a multitouch screen and their iLife productivity suite, in any netbook,” he said. “That’s obviously crucial.”

While Apple could conceivably delay any netbook decision indefinitely, Marshall pegged the second quarter as an optimum time to jump in. “Their ability to move [on a market] is second to none,” he said. “Just look at the what they’ve done in smartphones.

“It makes a lot of sense for the K-12 school market and, later, for back-to-school,” said Marshall.

Marshall is not the first analyst to place his bet on an Apple netbook. In December, Ezra Gottheil of Technology Business Research Inc. speculated that Apple would roll out multiple models at January’s Macworld Conference & Expo.

Apple’s only laptop announcement at the trade show was a revamped 17-in. MacBook Pro, which only recently began shipping.