Netbooks Hurting Notebooks; Will They Also Kill the MID Market?
It’s already safe to say that netbooks are taking a bite out of notebooks. Windows XP is on the majority of netbooks and Microsoft has already seen a decline in OS revenues because they can’t sell a $300 operating system on a $300 device. Add in the worldwide economic crisis and you’re seeing some people opt for cheaper computers that can handle most everyday tasks.
What about the MID or Mobile Internet Device market? I’m of the general opinion that the main difference between the MID and smartphone market is that one offers traditional voice calling and one doesn’t. Neither device runs a fully-scaled desktop OS and frankly, neither should. Yet both handheld devices are highly portable, offer web browsing and are in the same general price range as netbooks. So could the netbook start eating into the MID market which got off to a relatively slow start before netbooks even arrived?
There’s already some evidence that priorities have shifted away from MIDs and towards netbooks. Intel creates not only the small CPUs targeted for MIDs, but they’re a large backer of the software side too. The Moblin project that they help represents “Mobile Linux” and aims to be the OS of choice for MIDs. UMPC Portal is taking the latest Moblin version for a spin, but it’s not the version they hoped for. It’s for netbooks, not MIDs.
Digging deeper shows a project update from the Moblin folks earlier this month and here’s the kicker:
“Moblin Netbook is a fully featured complete distribution for NetBook like hardware built on Moblin Foundations with a complete modern user interface and applications. It is currently in the design and prototyping stage with expected beta releases slated for April 2009.
Moblin MID is a fully featured platform for next generation smart phone devices built on Moblin Foundations. It is expected for release in 2010.”
This is a complete reverse shift in priorities. How much? The Moblin.org project launched in July of 2007, which is months before the first netbook hit the market. MIDs were the focus then and even more so when the Intel Atom was announced in early 2008. Put another way: Moblin was initially envisioned for MIDs and smartphones and now that vision has taken a back seat to netbooks.
What’s interesting here is how Intel is indirectly making their own problem worse. They’ve experienced a decline in revenues as devices with lower-cost Atom processors are eating into traditional notebooks sales that have higher CPU profit margins. Yet, they’re feeding fuel to the low-profit margin netbook market by backing initiatives that could expand that same market. It’s interesting to watch.
Actually, you don’t have to watch. You can participate as well. The alpha (as in not fully featured, not likely to be stable) version of Moblin for Netbooks can be downloaded here. You can run it as a Live CD, so there’s no risk to wiping your existing OS.
Back to the original question then: Will netbooks kill MIDs? They alone won’t kill non-voice MIDs, but when combined with more capable smartphones, the one-two punch is a hefty blow that will keep this market niche at best. Of course, it all depends on your definition of a MID. I’ve often said that my iPhone is a great MID. Personally, any smartphone with a decent browser is a MID in my book, so I think the term needs to go away.
Philosophically isn’t a netbook a mobile internet device with a larger form factor than a “MID”? When faced with the tradeoff between size and ease of use, consumers seem to prefer the overall packaging of netbooks over smaller devices. As the market for portable web devices evolves, some concepts will succeed and others will wane.
I think the MID, like the UMPC, was a loser idea from the start. I don’t think the netbook is going to kill the MID, because the MID was going to be DOA anyway.
I think that the iPhone is a smartphone and a iTouch is a MID.
I think that if a notebook maker doesn’t make a netbook they will lose market share to those who do. Losing profit margin is better that losing profit all together.
I also think that when the term MIDs was coined nobody expected netbooks to be so popular. I for one didn’t think so. The same guy that thought he wanted a MID not some little laptop is happily typing this comment on a MSI Wind.
I think it’s important to keep in mind that there are a bunch of one-computer-for-the-household familes out there. Netbooks – cheap secondary computers that can run the same programs (given that they are running Windows) make sense. Portable devices whose primary or even sole function is to handle the internet don’t quite fit into the family budget.
And considering how often Mobile Safari crashes on my NON-jailbroken iPod Touch, I’m loathe to call it a MID.
I’m just surprised Intel hasn’t claimed a shortage of Atom chips yet, or ratchet up the prices. What with the cost of switching to the Nano/C7, I doubt they’d lose that many customers.
Put frankly, we don’t need MIDs anymore. Look at smartphones, they’ve grown to be more capable, and more functional. Plus, even the basic phones now have 3G internet. BAM, there goes the MID sector.
Especially since we have netbooks also providing low cost computing.
nate hit it on the head.. MIDs were that odd niche that were in between web browsing phones and regular computers. not a booming market.. the netbook hit the sweetspot. familiar form factor, decent web experience, and a price that was highly palatable. what has happened is exactly what bluemonq stated: people that wouldn’t have gotten that laptop or even considered a MID spotted that netbook at walmart and decided it offered a value and useability that was palatable to them. microsoft and computer companies should be happy they have a hot commodity on there hands, if even at a lower profit margin, during tough times..
I bought a Fujitsu U810 almost exactly a year ago.
Expensive, but I knew I needed a smaller second PC for all the travel I did and the EeePC was young in its life… (I think ASUS were only on their 54th update of the machine!)
Problem was that the Fujitsu turned out to be too small to be functional as work PC and too large to whip out and do quick browsing.
I sold it on ebay and bought an MSI Wind, an iPod Touch, an extra 1GB RAM, a 320GB hard drive, and had cash left over for a nice dinner!
Now I think I have a the prefect, (for me), suite of technology for real-world mobile computing.
I cannot see how the MID market will ever now get enough volume to make it worthwhile for companies to keep innovating.
Flipstart (and I guess also Sony with their UX range), made the right decision to exit the ‘tiny-is-good’ market when they did. Let’s see how many other models disappear this year.
I’m also backing up Nate here.
The MID got a ridiculous amount of web presence for something that never showed commercial success. Intel started promoting MIDs as a way of avoiding the negative UMPC press and the project just stalled and stalled.
UMPCs at least had one major player involved (Samsung) and they got some traction. MIDs never got off the ground before they lost their market to these new products: the Apple iphone/ipod touch and the Asus EEEPC.
The EEEPC in particular caught everyone by surprise. Notice that nobody even mentioned the term “netbook” until the other companies wanted in on the market. It was just a little notebook that sold with great success because it reached the price point that both MIDs and UMPCs promised but never delivered. Brilliant move by Asus after experimenting with UMPCs and deciding not to follow the sheep to Intel’s MID slaughterhouse.
By the way Intel is still making money so I don’t see what the big deal is.
The presence of linux loaded SSDs made HDD makers and Microsoft really nervous but theeir concerns seem to have been answered.
ones we see smartphones packing arm cortex based cpu, a os that can play nice with redfly like solutions, and most likely a webkit browser, one is looking at something that can really shake our concept of a personal computer…
I just finished reading the following article about the impact Netbooks are having on notebook sales: http://blogs.computerworld.com/netbooks_killing_pc_and_notebook_sales_its_a_myth
By the way, Windows does NOT cost $300 on any OEM computer.
wouldnt MIDS have had to be born 1st before netbooks could even kill them?
ever seen anybody using a MID besides a blogger?
lol, thats what i thought.
MIDs have always been a stupid idea since they were 1st thought up & as we all see went absolutely nowhere. now the only people even seemingly interested in them is because they are making XP drivers available (for people who want cheap alternative to OQOQ).
Netbooks are biting into notebook sales, there’s no disagreement there. But I would not be worried that the notebook market will suffer any real loss. There will always be strong demand for full-featured mobile computers, especially since over the years notebook sales have surpassed desktop sales. And while you may no longer see $2500+ notebooks on sale at Best Buy (RIP Circuit City), those expensive/powerful notebooks still do exist, as do the many enthusiasts/designers who crave such mobile horsepower.
I personally don’t like compromise. I’d prefer a single device that fits in my pocket and provides me with the ability to do work (mainly office apps) in the cloud, browse the net, listen to music, and make voice calls. i don’t want to carry 2 small overlapping devices. Then, at home, i would prefer a larger machine with enough power to do anything else i want to do.
so, i see no point in MIDs or netbooks, especially for myself.
Surfing the net or watching feature length movies on MID’s with screen sizes under 5″ is a bit of a joke. Keying in text with a seperate keyboard and having to flip back a forth between keyboard and application is not productive. If the MID doubles as your phone, maybe they actually offer some value. Netbooks are fantastic travelling companions and they do what laptops promised to do all along – provide function and portability along with real world usability. A 7-10 inch screen with a fully functional keyboard makes for a wonderful portable computing experience. Netbooks occupy a sweet-spot in the computing world and they are here to stay.