Size Matters When it Comes to Computing

It's fair to say that in computing, smaller is generally better than bigger, especially if a reduced size comes with more power. But large computer corporations, such as HP, Dell, Intel and Acer, aren't pleased with the latest small products to emerge from Taiwan. Two Taiwanese companies, Asus and Everex, have developed small, energy-efficient "netbooks" that are designed primarily for internet use and email. Netbooks have very little onboard memory, make use of very cheap chips, and sell for a relative pittance; a combination which has large computer companies seething as they see their already low profit margins drop even further.
While PC manufacturers dislike the cheeky little netbooks, consumers love them. It was initially thought that the netbooks would appeal to the education sector and adolescents, but the convenience, not to mention the retail price (a mere $300, £150, or R2244) has grabbed the attention of computer consumers at large and companies are struggling to keep up with demand. The Asus Eee PC sold out its global inventory of 350,000 netbooks, with suppliers running out of stock almost as soon as they get it. The Everex Cloudbook has not done quite as well, selling only 20,000 netbooks, but as demand increases, those figures seem likely to climb.
Predictions for the netbook market are very favourable. Market research firm, IDC, predicts that the netbook market will reach nine million by 2012. Intel foresees a far richer future and sets the number at 40 million units per year by 2011, which could be why they are currently developing their version of low-powered chips that can be used in netbooks, and the emerging net-tops. Net-tops are low-cost, energy efficient desk top computers also designed for purely online purposes.
While manufacturers such as Dell, Acer and HP prepare to enter the battle for netbook supremacy, some companies are choosing to stay well clear of it. Fujitsu says that the market simply isn't profitable enough for them to take part in. And even though Dell is entering the market, Michael Tatelman, who is their vice-president for marketing, believes that netbooks have "limited customer appeal". He believes that they may make useful second computers, or have value for people on the go, who spend a lot of time waiting in airport transit lounges or travelling on buses and trains, but they don't serve a truly constructive function.
Nevertheless, it seems like the computing giants have been caught napping in complacent self-assurance that what people want is more power and a greater array of functions, when instead, a couple of start-ups have struck gold by offering the barest minimum in computing simplicity. All that's left for the big boys to do is try to keep up.