Netbook Insights from The Economist

As a rule, I really enjoy reading the Economist. I find its articles to be well researched and its editorial positions to be well-reasoned. I also have a soft spot for it, as the Economist was the first “mainstream” business magazine to treat the topic of open source software with any degree of seriousness. (WIRED magazine was not exactly mainstream when it first treated the subject and most of the business weekies were stuck in the “if these crazy kids have their way, Bill Gates will be standing in the soup line before long” meme–not exactly credible.) The article Small Is Beautiful brings to light one of the most important trends of personal computing: the netbook.

The article begins with characteristic authenticity:

STEVE JOBS says Apple does not know how to make a $500 computer “that’s not a piece of junk”. Yet this article was written on a small computer that costs less than that-and barely a quarter of the price of the Apple iMac that sits on the desk beside it. Small, cheap mini-notebooks like this, or “netbooks” as they have come to be called, are not as fast or as capable as a big computer like an iMac, and in performance terms they trail behind most laptops. But they are certainly not junk, and for some people they may be the best computers money can buy.

I love the fact that this reporter is sufficiently confident of their own experience that they don’t need to call upon some industry analyst to get their opinion on the basic facts that every one of us can directly observe through our own experience! Moreover, considering that reporters live and die by their ability to write good copy on time, who better to say whether OpenOffice is up to scratch compared with Microsoft’s Word?

But what really got me excited about the article is that it gave me something to send both to my wife Amy and the head of our daughter’s school. Our daughter is now nine years old, and while she has an XO laptop (still running the “joyride” software build), she’s recently received a hand-me-down Mac iBook from Amy, and my daughter really does prefer the laptop that’s more like the ones she sees adults using. I want her to have a laptop that runs Linux, but I don’t want to be the sysadmin for an ancient PowerPC-based comuter. For $300 I can get something that looks, feels, and runs right. And given the amazing balance of features and functionalities that these new netbooks offer (they really are a quantum innovation beyond laptops, not only in terms of size and battery life, but also in their net-centric design assumptions), perhaps it is time to begin to update our school’s 100-year old technology policy.

And this brings me to my final point. For years I have known that the full potential of open source software has been restricted by monopoly software power and too many complicit hardware makers. I’ve had smart MBAs explain to me that nothing will ever change because the economics of the PC market–the personal computing aka desktop market–are too dependent upon monopoly royalty commissions and market development funds to even make a profit by selling hardware stand-alone. And those same MBAs told me that the XO would never be successful because those same hardware vendors could, if they wanted to, produce a computer that would have far greater capabilities at a far lower manufacturing price point. And yet…the XO did succeed in creating enough competition that Acer, Asus, MSI, and Samsung have all produced product that points the way to a 21st century computer, free from an operating system that refuses to move with the times.

Some of the financial reports I have been reading have suggested that netbooks are cutting seriously into laptop sales, just as laptops had been cutting into desktop sales. This does not mean that netbooks are bad–it just means they are disruptive. Netbooks have been able to break through price, energy, and even monopoly software barriers, and that’s precisely the kind of computer I want to see my daughter using. It’s really the most sensible choice!