Business Today

Dawn of the netbook

Cheap, svelte and robust, netbooks have reached a unique tipping point. An impending broadband revolution and rising incomes will render them as commonplace as your cell phone.

Kushan Mitra | Print Edition: September 20, 2009

In a crowded conference in Delhi’s Nehru Place in mid-2006, Craig Barrett, then Chairman of Intel, the world’s largest semiconductor maker, spewed venom at the One Laptop Per Child (OLPC) initiative started by Nicholas Negroponte, the head of the Massachusetts Institute of Technology’s Media Labs. The concept of a cheap laptop was ridiculous, bristled Barrett. It did not help that OLPC was using the ‘Geode’ processor made by rival AMD Corporation.

A machine with a Linux-based operating system starts at Rs 16,000
Costs the same as many mid-market cell phones available today
With content and connectivity falling in place, the demand for the device could explode
The trend of one PC per family will gradually change to one netbook per person
Students, not just of colleges, will provide a big demand push
Telcos plan to bundle broadband connections with the device
The spread of wireless broadband will increase the netbook’s draw
A further cut in broadband and datacard prices will help
Innovation allowing a mobile SIM to work with a netbook could boost demand
Intel’s Atom processor is specially made for netbooks
Battery life of netbooks is two times that of the average laptop
Nvidia’s Ion chipset renders superior graphics

However, back at Intel’s development centre in California, an altogether different scene was unfolding. Intel, regardless of Barrett’s public vitriol, had begun work on the ‘Atom’ processor that was aimed at powering exactly the kind of machine that Barrett was excoriating at Nehru Place—a laptop ‘lite’ that people were beginning to refer to as ‘netbooks’.

Today, Intel’s Atom chip is in the middle of the next great revolution in computing—the soon-to-be ubiquitous, no-frills, super-light laptop called the netbook. At the most recent Computex—the gargantuan world computer fair-cum-circus— held in the Nangang Exposition Hall in downtown Taipei, Taiwan, girls in skimpy polyester dresses advertising the latest computer wares weren’t the only ones attracting attention. In fact, almost everyone there seemed utterly captivated by the toy-like notebooks on display.

So far, 14.6 million of them have been sold worldwide in 2008, grabbing 11 per cent of the ‘portable’ computer market and numbers are expected to touch over 26 million in 2009. In India, 73,000 were sold last year, according to Vinnie Mehta, Executive Director, Manufacturers’ Association for Information Technology (MAIT), India’s hardware industry body—barely five per cent of the sales of 1.5 million ‘portable’ computers last year. Now, these numbers may not get the adrenaline of anyone in tech sales pumping— but according to most experts, it soon will. The reason for this is simple. India is at a unique tipping point in computing where a variety of trends have all serendipitously collided together to propel netbooks forward as the next big thing.

First, netbooks are cheap—around Rs 20,000 on average and a third of the price of a mid-range laptop, and at par with many high-end mobile phones, thanks to the lack of fripperies like disc drives, or abundant memory. Then, upcoming broadband auctions promise to ramp up connectivity. Plus, India has a wave of increasingly younger people who are Net junkies. Also, incomes across middle-class India have swelled, allowing a vast swathe of people who would normally not be able to afford a laptop to be pulled into the orbit of a netbook.

“Netbooks are creating a whole new category among ultra-mobile users, students and in the SME segment in class B and C towns,” says Rajan Anandan, CEO, Microsoft India. Naturally, a variety of computer makers—from Lenovo to Hewlett-Packard—have dived into the fray with models for the Indian consumer. Already, 40,000 units were sold just last quarter alone, according to S. Rajendran, General Manager, Sales and Marketing, Acer India. Acer expects the market for netbooks to be 175,000 units this year.

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