Wintel Abandons Netbooks

DisplaySearch reports that Wintel and suppliers are abandoning the netbooks. What they fail to notice is that without a low-priced version of that other OS and with GNU/Linux margins for netbooks are acceptable. The netbook will rise again. People love small cheap computers and a netbook is quite competitive against most tablets. Strangely, DisplaySearch notices that suppliers are reducing, not eliminating, production of display panels for netbooks but does not see this possibility.

They assume that without the patronage of M$, netbooks will die off completely, a fact not in evidence. We saw before netbooks with GNU/Linux selling like hot cakes. We will see it again. If M$’s partners will not fill the demand others will.

see The Potential Impact of the End of the Mini-note Era | DisplaySearch Blog.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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29 Responses to Wintel Abandons Netbooks

  1. oldman says:

    “BM was making competitive moves against M$ with an office suite and OS/2 so M$ delayed giving IBM a licence to distribute Lose ’95 which dented sales of IBM’s PCs.”

    The reality is that IBM was more responsible for OS/2 demise that microsofts hardball business. oOS/2 was an Expensive OS (costing between $200 and $500). It sdevelopment kits were also expensive and developers had to pay as well. IBM was also apparently very bad in providing support for its developers. The end result was that by the time Warp came out win32 apps running on windows 9x had already taken over rendering the win16 apps that OS/2 could support obsolete.

    As far as IBM’s PC sales are concerned, IBM had already rendered itself an irrelevance by continuing to stick with its microchannel based high prices PS2 line long after the market had gone to the cheap “clones” from companies like gateway. The cheaper IBM Ambra PC that I used to run OS/2 Warp was too little too late, and microsoft had little to do with it.

  2. oldman says:

    “You forget OS/2 warp and others that made dos look like crap. Price not quality is why dos won.”

    It is you who has the rose colored glasses, I ran OS/2 along with office 3.1 Excel/2 and MicroGrafx designer/2 on what was for the time well provisioned systems. The resulting system was not that much better, especially given the costs than one running DOS. A properly sized OS/2 system was not a small cheap computer!

    As far as “others” are concerned, there were none with anywhere near the applications.

  3. oiaohm wrote, “You forget OS/2 warp and others that made dos look like crap. Price not quality is why dos won.”

    Price was scarcely an issue. IBM was making competitive moves against M$ with an office suite and OS/2 so M$ delayed giving IBM a licence to distribute Lose ’95 which dented sales of IBM’s PCs. OS/2 on its own could not keep the IBM PC business going. When a business in the business of selling software licences refuses to sell software licences, the matter screams “anti-competitive behaviour”. Sales of IBM PCs were hurt and along with that OS/2 declined seriously. In those days, M$ had huge leverage with OEMs and abused it.

  4. oiaohm says:

    oldman the question is does Linux have to provide full coverage.

    The answer in a lot of businesses is no. Windows terminal server or equal can be running all the Windows software the business needs.

    oldman
    “Yet the desktop applications of the time that ran under DOS made either provided capabilities that didn’t exist in other ” more sophisticated” environments or which made them look like the antiquated crap that they were even then.”
    Rose coloured glasses. You forget OS/2 warp and others that made dos look like crap. Price not quality is why dos won.

  5. oldman wrote, ” linux IS a ghetto on the desktop side.

    And IMHO it will remain so – period.”

    How can you write that when many millions of people use GNU/Linux on the desktop with great satisfaction? A ghetto is not a satisfactory place. People in a ghetto are isolated. People who use GNU/Linux are not isolated. Neither are their computers nor software. Sharing does a lot of good for people and their IT.

    Ghetto – “Any isolated group of people.”

  6. oldman says:

    “oldman the questions about the future have no direct relevance to Linux of old. MS Dos was considered a ghetto as well.”

    Yet the desktop applications of the time that ran under DOS made either provided capabilities that didn’t exist in other ” more sophisticated” environments or which made them look like the antiquated crap that they were even then.

    The fact remains that just because you can dredge up some semi work alike for a commercial closed source desktop application doesnt mean that you have full coverage.

    The fact remains, as you well know and acknowledged with your various “its getting better” monologues, Mr. Microsoft VAR, that the linux IS a ghetto on the desktop side.

    And IMHO it will remain so – period.

  7. Viktor wrote, “I had no clue how to deal with Windows machines. And, anyway, I wanted Windows gone because Bill Gates is EVIL!”

    Actually, I had a clue but no installation media and no budget. You got the last part right, however.

  8. Viktor says:

    In the last school where I worked, I converted PCs to GNU/Linux because I had no clue how to deal with Windows machines. And, anyway, I wanted Windows gone because Bill Gates is EVIL!

    Fixed that for you, Mr. Pogson.

    Let’s sing together:

    Linux, Linux über alles
    Ãœber alles in der Welt

  9. oiaohm says:

    oldman the questions about the future have no direct relevance to Linux of old. MS Dos was considered a ghetto as well.

    It would pay to go and have a look at what zentyal and redhat are doing.

    Server side virtualization for those few odd windows applications you need. Desktops from Linux served up diskless or thin client but equally functional.

    Zone for Microsoft will be in the portable devices but there they will have to face off against android.

    The current tolerance point is moving down. Its more a question can MS follow or will they have to bail out.

    Presume for Linux usage is more going to be for business first.

    Really Oldman you do remind me of the old Unix guys when the Unix age was coming to a end.

  10. oldman wrote, “All is well of course until they have to do something that is windows only, then it is a different thing”.

    oldman, nothing is “windows only” except your thinking. People use computers to create, find, modify and to present information. That’s OS-independent. The whole concept of an operating system is that the routine, tedious, hardware, space and time stuff gets done out of sight so that the user and his applications can function without bothering with so much trivia. I have run stand-alone software and it’s painful. Changing anything requires lots of detail work. With a commodity OS, one just runs the applications and does not have to worry about low-level details.

    That other OS breaks the rules by interfering with the separation of church and state, with its burdens all the way to the user-level. GNU/Linux gets out of the user’s way so they get the best performance from the hardware.

    Look at some ways M$’s OS intrudes:

    • EULA restrictions (network connections, authentication, updates, re-re-reboots etc.) are nothing of interest or of value to users. They are all about M$ being able to sell more licences.
    • Exclusive dealing. When M$ makes a deal with a “partner” that for a fee a special API will be available and not to others, M$ makes sure lots of the users applications do not run optimally. That’s crap. That’s not a proper role for an OS.
    • Shifting file formats. How long did it take M$ to support open standard file-formats like ODF, and PDF? It’s not a proper role of an OS to exclude technology from one or more organizations.
    • Slowing down. An OS should perform on year 6 just as it did on year 1. M$ is always tweaking its system so it runs more slowly with time so the customer will be pressured to buy “new, faster” hardware. That’s not a proper role of an OS.

    I had an amazing example of slowing down. In the last school where I worked, I converted PCs to GNU/Linux because GNU/Linux was superior in every way. I found one exception. A PC in a private office had never been on-line. It had half the number of processes and plenty of free RAM compared to identical machines that had been on-line and updated. The difference in performance was amazing. The isolated machine performed almost as crisply as GNU/Linux.

  11. oldman says:

    “Whats even more exciting is when you install Linux over XP/Vista and the user exclaims that their old computer feels like brand new again, been told that numerous times.”

    And so you rely on their ignorance to stick them in the linux ghetto. All is well of course until they have to do something that is windows only, then it is a different thing eh dougman?

    I’ve had THAT experience quite a few times helping friends paste their windows systems back together after some linux geek “helped” them.
    .

  12. dougman says:

    Re: Current tolerance point is about 500 with pressure to go to 250 or less.

    I agree with that statement.

    Newegg was running a special on Lenovo 64-bit desktops for $299.00 of which I handled ~20+ installations and upgrades for customers. One was told she needed to spend $1000 for a “REAL” good computer, I laughed so hard I dropped the phone.

    Whats even more exciting is when you install Linux over XP/Vista and the user exclaims that their old computer feels like brand new again, been told that numerous times.

    Also regarding Linux NAS using Samba, here is a guide for Ubuntu 12.04: http://ubuntuserverguide.com/2012/06/install-samba-server-ubuntu-server-1204-lts.html

  13. oiaohm says:

    Clarence Moon
    “It starts with a specification and a price point is determined based on what the market will bear.”
    What the market will bear has been dropping very regularly for the past 30 years.

    About every 10 years it halves. Current tolerance point is about 500 with pressure to go to 250 or less.

    There comes a point were MS will not be able to hold their profit.

    The mass amount of android devices is directly linked to two facts. One Intel hardware has been priced too high for the market bear level in lots of markets. Number two Windows is also priced to high for many markets bear level.

    So is crunch time. Microsoft might try to turn into the a apple like company to try to avoid the crunch.

    Every single major OEM these days produce a percentage of arm and android devices. The writing is on the wall for what the market wants. Question is can Microsoft bend far enough to provide it.

  14. Clarence Moon, not understanding the concept of risk, wrote, “Then the product manager sees if the product can be produced and delivered at a cost that will result in an acceptable profit. If so, it is a go. If not, the product is not launched and some other product is produced.”

    Many products are produced and profitability is uncertain until a certain number of units are sold, the break-even point. There is a risk that no matter how efficient the manufacturing design and process that the market will reject the project and it will not succeed. OEMs take some risk with every new product especially if it deviates from the norm in order to distinguish itself from others. A product may be produced or not depending on the estimation of risk. A product that can be produced profitably may not deliver a profit.

  15. Viktor wrote, “Now you even fail at language”.

    How is it possible, Viktor, for a non-technical person to “understand” technology? Superficially, at best. Non-technical people think the OS is $0 because they don’t get a bill for it. What are they to make of the licensing fee for “Server” let alone inActive Directory, the restrictions in the EULA, CALs, etc.?

  16. Clarence Moon says:

    and pass the cost on to the customer

    That isn’t the way that product marketing works, particularly in mass markets like PCs. It starts with a specification and a price point is determined based on what the market will bear. Then the product manager sees if the product can be produced and delivered at a cost that will result in an acceptable profit. If so, it is a go. If not, the product is not launched and some other product is produced.

    One of the most significant specifications decisions would be to have a Windows OS or not. Two very different products would result based on going one way or the other. So the cost of Windows is not “passed on”, rather it is a fundamental determinant of the product produced.

  17. Viktor says:

    Which is it oldman? Does M$’s server require understanding or just a non-technical person? Can’t be both I guess.

    Now you even fail at language, Pogson. Very sad.

  18. oldman contradicts himself when he wrote, “Windows servers especially from 2008 on are actually quite solid and stable and a hell of a sight easier for non technical people to handle than your average linux server. Could it be that your experience implies a lack of understanding how to configure a windows server?”

    Which is it oldman? Does M$’s server require understanding or just a non-technical person? Can’t be both I guess.

    su root;apt-get install apache2-mpm-prefork mysql-server-5.5 php5-mysql libapache2-mod-php5 some php script

    seems pretty easy. How does one do it with that other OS? Oh yeah, one starts by getting a purchase order requisition, politicking, purchase order, document the licences, get some media, install that other OS (server version), install other stuff and don’t forget to plug it into inActive Directory and some other stuff…

    Yep. I will never go back to the old way of separating me from my money just to use what I already own.

  19. oiaohm says:

    oldman who says you have to deploy an average Linux server. http://www.zentyal.org/ There are small business forms. With samba 4 and the up-streams the questions is do they need the MS server at all.

    Zentyal and other are designed for the non technical. These are evolving as well.

    iLia
    “The fundamental problem with netbooks is their extremely low price, with Windows or without Windows, and low price means low margin.”

    This is broken record that keeps on repeating same thing was said about PC costing less than 1000 dollars in the year 2000. Since 1000 dollars the margins would be too small. Today 500 dollar computers in stores are common.

    Entry point is moving down all the time. Each entry point change there is resistance by the retail before they have to just accept it and move on. The current entry point being pushed for is sub 200 dollars.

  20. oldman says:

    “People don’t pay for Windows? I am scratching my head just trying to understand that one. I am VERY sure the OEM’s include the cost into the product.”

    My bad, I should have said pay an average of $25-$50.00 that is rolled into the cost of their system.

    “The hole, exploit, bug should not have been available to begin with. Yes fixed, as in band-aided and duct tapped till the next problem arises I completely understand how M$ works.”

    As opposed to the massive band-aid that is Linux? spare me.

    “if they want a file server that does not break and is rock-solid I give them a Samba server based on Linux.”

    Where as I might give them an appliance based on OpenFiler or sell them one of a myriad of NAS appliances.

    Very few offices need all the extras of a server Mr. D.

    Windows servers especially from 2008 on are actually quite solid and stable and a hell of a sight easier for non technical people to handle than your average linux server. Could it be that your experience implies a lack of understanding how to configure a windows server?

  21. dougman says:

    I do deal with it very well thank you. By using Linux, I do not need to deal with the waste and all idiocy that comes with M$.

    People don’t pay for Windows? I am scratching my head just trying to understand that one. I am VERY sure the OEM’s include the cost into the product.

    The hole, exploit, bug should not have been available to begin with. Yes fixed, as in band-aided and duct tapped till the next problem arises I completely understand how M$ works.

    Regarding my clients, they are free to use whatever they want. If they want Windows I give them Windows, if they want a file server that does not break and is rock-solid I give them a Samba server based on Linux.

  22. Dyl says:

    > FUD #1 most people dont pay for their microsoft OS’s, they get them with their computers and then stay with them untill the hardware dies.

    Uhm, what? You think OEMs get free copies from Microsoft to install on those computers? No, they pay for it (certainly at a steeply discounted price) and pass the cost on to the customer.

  23. oldman says:

    “Anyone that pays $300-$250 for an operating system is wasting money. Even doubly so, when M$ system updates can infect your computer now!”

    FUD #1 most people dont pay for their microsoft OS’s, they get them with their computers and then stay with them untill the hardware dies.

    FUD #2 Do you really believe that this hole is going to stay open sir? It will be fixed, and all will move on

    Regardless of the above, I am willing to bet that you you STILL wont be able to get the bulk of your customers to consider a Linux based desktop.

    Deal with it!

  24. dougman says:

    Re: A smartphone is a better choice.

    Not all the time, try using a word processor and tell us that.

    Re: $1500 laptop

    Anyone that forks out >$500 for a laptop is wasting money.

    Anyone that pays $300-$250 for an operating system is wasting money. Even doubly so, when M$ system updates can infect your computer now!

    D.

  25. iLia wrote, “low price means low margin”.

    Nonsense. Margin means the difference between cost and selling price. If the selling price is low and the cost is lower there is a margin. Folks sell netbooks in the $200-$300 range. There’s plenty of margin there if OEMs replace $50 of licence to M$ with $0 for GNU/Linux. The problem is that other OS, not the selling price of the goods. Further, one can sell two netbooks for the price of a notebook and make a decent margin twice. This is a huge advantage for the smaller whitebox OEMs. Less capital is tied up in inventory and cash-flow is better. The world is still making/selling ~5million netbooks per annum. They are good business and a good buy with GNU/Linux.

  26. iLia says:

    The fundamental problem with netbooks is their extremely low price, with Windows or without Windows, and low price means low margin. It seams to me that it is much, much more profitable for OEMs and retailers to sell one $1500 laptop than 10 netbooks, and one netbook takes almost the same time to produce and occupies almost the same space on the shelf.

    Maybe consumers like netbooks very much but as long as it is not profitable to producers/retailers to produce/sell them, netbooks will be outsiders. Harsh reality.

  27. iLia wrote, “it means that people don’t buy netbooks that much.”

    Which came first, the decline of netbooks or M$’s forcing that other OS on OEMs? With M$ leaving the market for netbooks, that market will expand because a netbook can now be made less expensive. Price matters. Someone who would buy a netbook may well not buy an ultrabook or regular notebook because of the size/weight/price. I know lots of people who have a netbook and love it. When it’s lost/broken they will buy another.

  28. iLia says:

    DisplaySearch notices that suppliers are reducing, not eliminating, production of display panels for netbooks but does not see this possibility.

    Actually it means that people don’t buy netbooks that much. Maybe they are simply not in love with them? A smartphone is a better choice.

    The netbook will rise again.

    Atlantis will rise again.
    Amiga will rise again.
    The South will rise again 🙁
    MS Dos will rise again.
    The US dept will fall 😉

    Do you know what “wishful thinking” means?

  29. dougman says:

    I have had people give me so many netbooks that came with a half-baked version of Windows, its not funny. They were planning on tossing them anyways.

    I clean them up, and put Android or Linux on them and sell for $50.

    Who can beat a $50 netbook?

    D.

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