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Armed with Android: A Chinese company plans to sell inexpensive netbooks that run Google’s open-source operating system, Android.
Skytone
Google's operating system could help usher in an era of ultra-cheap laptops.
Just a few years ago, many pundits expected consumers to shun netbooks. With less power than traditional laptops, a tiny screen and keyboard, and more bulk than a mobile phone, they appeared, at first, to be solving a problem that no one had. But thanks to good design, decent battery life, and, above all, a cheap price, the netbook took off. A few years on, many people have come to rely on one as a more-mobile, secondary laptop.
But the netbook could be about to splinter. Skytone, a Chinese manufacturer, has started showing off the first netbook to run Android, an operating system developed by Google that currently runs on just a single device, the G1mobile phone. Using Android makes sense for Skytone because its netbook is minimal (even by netbook standards): it supports 128 megabits of RAM and only up to 4 gigabytes of storage on a flash-based, solid-state disk. And importantly, its central processing unit is an ARM11 chip--the same model found inside the iPhone.
Dubbed the Alpha 680, the netbook has more in common with a phone than with a normal laptop, says Phil Solis, an analyst with ABI Research. In addition to the processor and operating system, it's expected to retail for about $250--less than some high-end smart phones. This bare-bones device may point toward a trend, Solis says, with more netbooks relying on cell-phone chips--known for power efficiency--and on cell-phone operating systems.
"You can't run Windows on ARM," says Solis, "but all mobile operating systems are made to work on ARM. That opens it up to Windows CE, Symbian, and Android. Those are made to work in tighter constraints."
Currently, many netbooks use Intel's Atom processor, which is built using the x86 architecture found in most of the company's desktop, laptop, and server chips. Most netbooks get about an hour of power per battery cell. On an ARM-based notebook, Solis says, it could be possible to get eight hours from a three-cell battery.
Of course, while long battery life is appealing, there is a definite trade-off. "If you're looking for a powerful speedy laptop, then these netbooks aren't for you," Solis says. "But if you're looking for something that can last you all day without recharging, and that's at an even lower cost than most netbooks, then these might work."
Android is being tweaked to take advantage of streamlined netbooks by manufacturers interested in using an open-source operating system that has the heft of Google behind it.
It's unclear, however, how much influence Google will have on Android's evolution. The company declined an interview for this story, responding with a statement: "Android is a free, open source mobile platform. This means that anyone can take the Android platform and add code or download it to create a mobile device without restrictions. The Android smartphone platform was designed from the beginning to scale downward to feature phones and upward to [mobile Internet devices] and netbook-style devices."
Computer users are getting smarter. Even newbies have heard of the disasters and experienced them with ultra-cheap devices of all types. Everyone I know has had a Tech Turkey!
The assumption that lots of people will continue to buy the item with the cheapest first cost is a guess. I suspect computer users are going to look more closely.
In the broad sense of the market, one might ask if the cheapest are going to compete with the better models priced $200-$400 more, which indeed are already offered. A few loaded netbooks are already over $800.
What happens when Apple cuts into the market with something innovative that gets rid of the keyboard and still has a 10-12" touch screen & is around $800-900?
In broad market terms, the 5 year stock chart on Dell looks like the inversion of Apple. If netbooks were really on a tear and taking down the norms in buying, would not Dell be in a big uptick?
Um, razor thin margins and the potential for an even worse outlook with a proliferation of Asian manufacturers on the horizon, might account for Dell's trend going forward. Dell's trend to now is not based on the netbook, but the notebook market.
Apple's style might earn it a fraction of the super-low-cost netbook market, but ... there are two completely different markets, and Apple may lose more iPhone users to netbooks then it gains.
Battery technology may be the biggest delta for this market near-term. Better batteries are likely to make netbooks even more attractive to the email, social networking, and other cloud app markets.
Probably the best money to be made in these markets is in financing. Because they are networked the consumer can be turned on and off easily. Even the B2B financing should have better margins then the manufacturing side.
Wal-Mart's distribution system, volume purchasing leverage, and worldwide footprint -position it to be a market leader in netbook retail. If Wal-Mart had ownership in Chinese netbook manufacturing and retail sales in China, it could use this RMB income and purchasing to hedge against the USD devaluation and be an even stronger price competitor in the US. The exchange rate margin offset is likely to be a significant consideration in this thin margin market.
Manufacturing in the United States is in trouble. That's bad news not just for the country's economy but for the future of innovation.
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67 Comments
"Just a few years ago"?
"A few years on"? This article makes it sound like netbooks have been around for a while. The original Eee PC 701 only reached the stores in Oct. 2007, which is just barely a year and a half ago.
Furthermore, you mention Symbian, Windows CE, and Android - none of which are on netbooks right now - but fail to mention that Linux already runs on ARM, or that Ubuntu Linux - which is already on a number of netbooks from Dell and HP and is far more popular than Android - has an ARM port now just for these ARM netbooks.
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