Back in business school, one cardinal rule taught by the professors was that an enterprise should never cannibalize its existing market. Let’s take an example. ACME Corp produces high end cellphones. It makes $1 Billion out of it. Later, it makes PDAs that also serve as cellphones and for the same price. This effectively kills its cellphone division. True, it rakes in cash from the new product; the old product line, however, founders and perishes. That’s potential income lost because of the lack of differentiation.
These days, I see the computer industry going the same way with their Netbook line. Netbooks have increased in power and efficiency so much that there now exist a blur between Netbooks and full blown notebooks. Technologically speaking, and from the perspective of a user, both already achieve the same thing. The only difference is the price.
Full blown notebooks start at $800 and tend to cap off at $2000. Netbooks start at $200 and tend to cap off at $450. Notebooks come in screens 12″ and larger. Netbooks come in 8″ to 10″ screens. Beyond this significant difference, there is little else. A netbook can now do what most notebooks can. Just now, I’m pecking away at my Asus 1005HA powered by an N280 Atom processor and 2GB of RAM. Simultaneously with the creation of this article, I’m also compiling a PDF from Word and making minor changes to a jpeg on Adobe Photoshop CS4. Guess what? The netbook is grinning all throughout. No marked slowdowns. No blue screens of death. In fact, it’s behaving as responsively as my Compaq Core2Duo! I’d think this little baby were my main laptop where it not for its size!
If other people begin to feel the same way, I can imagine the manufacturers losing great revenue from their Notebook line. Why would folks pay twice the price for a notebook, when a netbook can handle the same job? Notebooks now look like overly expensive gargantuans that are simply unportable in comparison. Notebooks appear to be best off for home as desktop replacements. Relatively, they’re large, heavy and power hungry, Netbooks, on the other hand, are the new ultraportables without the unconscionable price of previous ultraportables costing $2000.
Are you a netbook fanatic?
