Behind Your Business

Netbooks have been flying off store shelves all year long, driven by consumers looking for ways to save money during economically challenging times. According to the latest figures from DisplaySearch, netbook revenue is poised to rise 72 percent year-over-year to $11.4 billion in 2009, even as sales of portable PCs overall decline 12 percent to $109.4 billion.

With the economy now on the mend, however, netbook sales are expected to be challenged next year because of continuing declines in the average selling price (ASP) of standard notebooks, which offer significant performance advantages. As a result, notebook makers are steadily "increasing the performance gap" in comparison with netbooks "while narrowing the price gap," noted DisplaySearch Director John Jacobs.

Performance Shortcomings

Dell hopes to mitigate this performance gap by offering a high-definition display, HD accelerator, and HDTV tuner on its revamped Inspiron Mini 10, which will run a new Intel processor for netbooks that combines an x86 CPU with a graphics processor. On the downside, however, the new Atom N450 chips feature a relatively slow clock speed of just 1.66 GHz, which means netbook users may experience noticeable performance declines when running multiple applications.

"They aren't for 3-D gaming and multitasking," said Bill Calder, a corporate communications manager at Intel. "For that, Intel offers a wide range of full-featured [chips for] laptops -- including some exciting new Intel Core systems based on our latest 32nm process technology coming soon."

Netbooks don't incorporate built-in DVD players, so users are unable to play movies stored on standard discs. Moreover, rising adoption rates for Windows 7 may pose an additional problem for netbook makers in the year ahead.

As consumers become more familiar with Windows 7 on standard machines, the capabilities missing from the netbook version -- known as Windows 7 Starter -- are likely to become more obvious. For...