Despite the current economics, netbook sales have been growing at double-digit rates. It’s one of the few hot spots in the consumer computing space. There are now more than 50 vendors with an offering across EMEA!
What’s really interesting is the shift toward the importance of the telco channel in accelerating netbooks sales. The decreasing price point of netbooks, while not necessarily exciting the hardware manufacturers, is enabling new ecosystems and use-cases, and it’s facilitating a value-system shift from the hardware to the newly enabled ecosystems.
In Europe, for example, this shift has been toward wireless data service providers, in much the same way that inexpensive handsets enabled wireless voice services. But there are many other exciting possibilities in after-market sales, with decreasingly expensive devices. According to IDC, “mini-notebooks will continue to shake the industry from both a go-to-market and a pricing perspective”.
Jagged Price Path
Sales prices (not factoring in subsidies) don’t necessarily have to follow a smooth and continuous curve. Sometimes there are significant changes which drive big step function price decreases. I’m presenting one such change, which I believe would change the pricing point enough to drastically accelerate adoption and enable new after-market value systems to emerge, especially in developing nations.
In short, I believe this change would help enable the next billion people to get connected. It’s worth pointing out, when those people come online, they’re not necessarily starting with the same expectations, given they’re starting from nothing or very little. So the form factor for the next billion doesn’t have to obey the same rules as the first billion. Sometimes we need to think differently to see where the change will come from.
So how do we make an extremely high-volume, high-competition device like a netbook even less expensive? Well, how about the following idea.
Why do the smarts of the netbook need to be an attached part of the netbook form-factor? Imagine if we split a netbook into two: one display unit that essentially had the functionality of a Celio Redfly (smartphone companion) device, and another smarts unit with a CPU, memory, network port, storage and wall power plug (which ideally would fold in when not in use).
Let’s assume the display (and keyboard) unit is driven by an inexpensive integrated SoC solution; no RAM, disk, or additional intelligence is needed. It would have integrated WiFi to speak with the smarts unit. To have something concrete in mind, let’s say the smarts unit looked something like the Marvell SheevaPlug, or some other product of their Plug Computing initiative. The two units could communicate via WiFi, or perhaps a USB port (also good for recharging batteries). Potentially, these two units could snap together like Legos to form something on the order of a conventional netbook or tablet. If one got creative, the USB port could even be used as the data and power connection to keep the BOM (bill of materials) costs low. But they don’t need to physically attach to keep the design simple.
This arrangement would at first blush seem to increase the BOM cost. But that’s assuming everyone needs the smarts unit, which they don’t! A home or work PC can function as the smarts, as can a laptop or an educational server, or a smartphone. Anything programmable with even humble computing capabilities and wireless communications can act as the brains. Additionally, there’s no reason why one smarts unit can’t support multiple displays (essentially a terminal server), which means one smarts unit could potentially support a household or small classroom, when needed at all.
Having less hardware in the display also requires less battery costs and weight, which allows it to be manufactured less expensively. Effectively, we’ve lifted out redundant costs and power consumption, and put them in a separate unit which can be shared or is not needed. Perhaps as e-ink solutions come down (helped along by the Amazon Kindle), power consumption could become even lower, further reducing the battery input costs.
Wealth of Opportunities
I mentioned enablement of after-market value systems. Thus far, wireless data services has been one such case. But what else could we do with extremely inexpensive netbook-like devices? To be sure, enabling the next billion people opens up significant educational opportunities — a whole ecosystem of its own. But what about electronic books in general?
By definition, there’s an entirely untapped market for low-cost versions of books in electronic form, because those people don’t have devices yet. We have the concept of low-cost drugs for developing countries, why not e-books? Or, what about social networking? Could an extremely inexpensive device be branded by Facebook?
Why not be the first thing people learn to use when they enter the connected world? Or how about a Google branded device? Maybe an Android companion would be interesting. There are just so many opportunities here. The question in my mind is, who will do this first?
Kevin Lawton is a pioneer in x86 virtualization, serial entrepreneur, founding team member in a microprocessor startup and the author and lead for two open source projects: Bochs and plex86. He blogs at trendcaller.com.