Coop's 3 Tech Predictions for 2009#2--Atom Avalanche

I mentioned earlier that I'd done my part to stimulate the consumer electronics industry by purchasing two netbooks on Black Friday. In that post, I talked about how stoked I was to be able to pick up a pair of very useful and very portable computers for $300 each. Whether or not you believe that Moore's Law still holds true, it's fair to say that Intel's ability to pack more and more transistors into smaller and smaller dies continues to prompt innovation in entirely new classes of products, one of which is netbooks.

If you'd told me six months ago that I'd be buying two laptops on Black Friday, I'd've said you were nuts. I already own a year-old MacBook and a year-old Mac Mini; and, since VMWare Fusion provides so much flexibility, I really didn't have a need for any more computers, even as sandbox machines. Or so I thought. But at $300 for a well-reviewed machine with such an alluring form factor, I figured I'd give it a shot. And, once I got to the store and learned that they only had two left, I figured I might as well buy 'em both. As The Wife will tell you, I can justify pretty much anything.

I immediately set to work customizing the hardware on one of the machines. And, by "customizing", I mean "ripping it open". Since netbooks are a class of device intended to be lower-end than typical laptops (a rapidly narrowing gap I'll discuss momentarily), they aren't exactly beefy in their default configurations. I picked up an extra gig of RAM when I bought them, figuring that I would test the performance of a 2 gig netbook versus a 1 gig netbook. In the end, the stock 1 gig netbook is quite usable, but I couldn't pass up the opportunity to rip the bottom off the netbook to see what's inside, installing an extra gig in the process.

After installing the extra memory, and replacing 8 of the 9 screws in the bottom cover, I set to work customizing the software on the machine. And, by "customizing", I mean "blowing away the recovery partition and wiping out the hard disk". A few hours and a few Diet Pepsis later, I had a very diminutive, very cool computer on my hands. Getting the netbook configured with all my applications took quite a few more hours (and an Obra Prima), but after one day, I had a machine that provided me about 90% of the functionality I need, in a form factor half the size and weight of my MacBook.

Which brings us to the paradox of the netbook.

About four years ago, The Wife purchased her first notebook. She wanted something extremely small and reasonably powerful, and was willing to somewhat sacrifice performance for size and portability. Since airplane seat pitch was getting particularly bad at that point, she chose an ultra-portable from Fujitsu. Key specifications on her Lifebook P7010 were:

• 1.2 GHz ultra-low voltage Intel Pentium M CPU
• 512 MB of RAM
• 10.6" 1280x768 screen
• 40 GB hard disk
• Modular DVD/CD-RW combo drive
• Standard battery providing ~4 hours use
• Dimensions of 10.27" x 7.83" x 1.26"
• 3.3 pounds

For that state-of-the-art notebook, she paid north of $1600, coming in that cheaply only courtesy of a colleague's friends-and-family discount. While her machine paled in comparison to the laptops I was carrying at the time from a speeds and feeds standpoint, hers was an awesome piece of engineering, providing better battery life than my much larger and beefier Dells, although I had quite a bit more computing horsepower.

Jump forward four or so years.  The MSI Wind U-100 I purchased came configured as follows:

• 1.6 GHz Intel Atom CPU
• 1 GB of RAM (I paid $15.99 for an extra gig and installed it myself, joyously voiding my warranty in the process)
• 10" 1024x600 screen
• 120 GB hard disk
• No optical drive
• Standard battery (3-cell) providing ~1.5 hours use
• Dimensions of 10.23" x 7.08" x .748"
• 2.3 pounds

For $300! As a consumer electronics industry, I think we sometimes get jaded to the progress that can occur in a single quadrennium, but this is one heck of a reminder that sometimes you need to eat your young to survive. Netbooks are presenting the personal computer industry with the classical Innovator's Dilemma--by utilizing new technology to go after new markets, or to lower prices in existing markets, are you going to kill your competition, or yourself? Or both?

Intel is the leading arms merchant in this particular case; its Atom processor is at the heart of most of today's netbooks, although the crop being announced at CES next week will also include CPUs from a number of vendors, including ARM.  2009 is going to be an exciting year in this particular segment if you're a consumer, although I'm pretty happy I don't work for a PC manufacturer.  As netbooks become more and more feature-laden, the line between netbooks and traditional notebooks isn't just blurring, it's being obliterated.  Dell's forthcoming 12" netbook is going to do extremely well--in some cases, at the cost of other Dell models. Sony's pending announcement will further confuse the netbook/notebook gap.

Netbooks are a huge opportunity all around, but they have the potential to be a huge liability, too. PC manufacturers must attempt to delineate between their different lines; but, right now it's a land grab, so getting products to market is more important than having a cohesive sales and marketing strategy for the time being. Retailers need sufficient training and guidance from their vendors, so that floor personnel can assist consumers in making educated decisions--the dilemma being that netbooks are lower-margin products with lower attach rates, so it may be in a retail salesperson's best interests to push a higher-margin notebook, despite a netbook being perfectly suitable for a particular consumer need.

For consumers, the advent of netbooks are almost entirely win-win. For those consumers who didn't own a computer in the past, it's now possible to buy a self-contained, fully-functional machine running Windows XP SP3 for less than $400. That's awesome.

One more thing that's awesome--the netbook economy may put enough pressure on Apple that we'll finally see a lower-priced portable Mac.  Apple has always marched to the beat of their own drummer, so predicting that Apple will respond to what industry pundits and sales numbers dictate is akin to dancing for architecture.  But the similarities between the Intel chipset in my MacBook and the Atom chipset in my Wind are hard to ignore, particularly in the open source community, where it only took a couple of months from the time Atom-based netbooks started shipping until some very smart people had figured out how to run OS X Leopard on them. Not only does it run, it runs well, I can assure you.

A mere nine weeks ago, Steve Jobs commented that "We don't know how to make a $500 computer that's not a piece of junk, and our DNA will not let us ship that". But, he also said "We'll wait and see how that nascent category evolves. And we've got some pretty interesting ideas if it does evolve." Well, in this world, a lot can happen in nine weeks, as Wall Street and Iceland both learned. My $300 Wind isn't a piece of junk, although I can comfortably say that certain aspects of its hardware would not pass the Jobs-o-meter. However, do I believe that Apple knows how to make a $500 computer that's not a piece of junk? Yeah, I do. Certainly, announcing a netbook would present Apple with their own dilemma; the MacBook Air is Apple's ultra-portable computer (notwithstanding the iPhone, which Jobs has said he considers to be Apple's netbook), but with a price tag well beyond that of most notebooks, much less netbooks, Apple would almost certainly be giving the Air a death sentence by introducing a netbook.  Cutting off its Air supply, if you will.

Sorry, I couldn't resist.

Whether or not Apple enters the netbook game in 2009 (and I think they will, no later than mid-year), two other contenders of interest come to mind--Microsoft and Google, both of whom will feed the netbook beast in 2009.  I expect to see the first Android-based netbooks by mid-year; Android will likely be the first Linux-based netbook operating system which actually provides a suitable operating environment for typical consumers.  Whether or not you're a fan of Microsoft, you can't dispute the numbers that return rates for certain vendors' netbooks are four times as high for Linux-based devices versus those running Windows.  And, while Windows XP SP3 runs just great on most netbooks, I'm already hearing very encouraging stories about the performance of Windows 7 on various netbook platforms.

So, whether you pick up a netbook for your kids, as a second (or third) machine for yourself, or as the very first portable computer you've owned, you have a lot to be excited about in 2009.  Intel threw down the gauntlet with the introduction of the Atom; other netbook-friendly CPUs will soon follow.

Few of us know what 2009 will bring, particularly on the heels of such an economically brutal 2008.  Hopefully, 2009 will be long-remembered as the year of recovery, but that's a prediction I'm not prepared to make.  One that I am prepared to make is that 2009 will be the year of the netbook.

Consider it an Atom-ic explosion.

CES updates from Las Vegas will start on January 6th.  Make sure to check back on January 7th for my #1 2009 Tech Prediction.