Is the Netbook Doomed?

Even as it poked fun at Microsoft (Nasdaq: MSFT  ) during its annual I/O developer conference in San Francisco yesterday, Google (Nasdaq: GOOG  ) may have unwittingly helped Mr. Softy.

Death knell for netbooks?
CEO Eric Schmidt kicked off the proceedings by invoking the spirit of his former boss -- Sun Microsystems' (Nasdaq: JAVA  ) co-founder Scott McNealy -- in declaring an age of opportunity for browser applications. "The browser is the computer," a headline at CNET's News.com blared.

Can you imagine if he's right? Buh-bye, netbook. Hello, PC.

Why? Cloud computing is exceedingly complex, like a giant machine with millions of microscopic moving parts. Some of those parts exist on the machine you're using right now. Memory, CPU horsepower, Internet bandwidth -- the degree to which your system can deploy and consume these and other system resources plays a huge role in how effective you, the user, will be in accessing services and software in the cloud.

Schmidt referred specifically to HTML 5, but that's really just a code phrase for "scripts" in general. Scripts are lines of code that are designed to execute some function in a computing system or network. Cloud computing environments depend on scripts to "call" a remote server or database and retrieve code that adds to your experience -- by playing a video, for example.

Nyet, netbook, nyet
Do today's netbooks from have the horsepower to run multiple simultaneous scripts inside a full-featured browser, in a way that replicates the PC experience? I doubt it. Scripts consume CPU cycles. Some of them consume boatloads of CPU cycles.

Try using a Twitter client, which uses Adobe's (Nasdaq: ADBE  ) AIR platform for accessing the cloud. My client of choice, Seesmic Desktop, occasionally threatens to consume a third of my MacBook Pro's processing horsepower. Now tell me again why anyone would want to leave cloud computing to the netbooks?

Hello? Is anyone there?
Interestingly -- and not coincidentally, in my view -- demand for netbooks has softened, even as cloud computing ascends to the levels of which Schmidt spoke. Sales of Intel's (Nasdaq: INTC  ) low-power Atom processor fell through the floor in the most recent quarter, allowing rival Advanced Micro Devices (NYSE: AMD  ) to pick up market share.

PC shipments, meanwhile, are expected to see flat to slightly negative growth in the second quarter. Not so good, right? Sure, but better than the backsliding we're seeing in netbooks. Only time will reveal whether the sudden slackening of netbook demand is a hiccup or a trend, but I sense we've entered a Tim "The Tool Man" Taylor era of computing, in which we crave more power because we want to do more with the cloud.

Raining on the cloud computing = netbook nirvana myth
I have no doubt that Schmidt is right. Cloud computing is inevitable, but not because it's easier to implement or costs less. Browser-based software is more intelligent because it's more connected. Only on the Web can you view a map, get directions, and confirm your movie tickets, all in the same screen.

So let's please drop this idea that the Web is some grand egalitarian utopia where digital 98-pound weaklings don't get sand kicked in their faces. They do, okay?

If anything, the shift to cloud computing is ushering in an era of PC muscle machines unlike any we've seen before. Certainly, that's good news for higher-end computer makers such as HP and Apple (Nasdaq: AAPL  ) .

But it's good news for Microsoft, too.

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Fool contributor  Tim Beyers had stock and options positions in Apple and Google at the time of publication. Check out Tim'sportfolio holdings andFoolish writings, or connect with him on Twitter as  @milehighfool. The Motley Fool is also on Twitter as  @TheMotleyFool. Its  disclosure policy needs coffee. Now.


Read/Post Comments (5) | Recommend This Article (7)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 28, 2009, at 2:13 PM, danno1234 wrote:

    I could not disagree more. This is a case of "a little knowledge is a dangerous thing". I am a CPU designer. One of the most frustrating things for me is that we keep giving more compute cycles, and the majority of users are shacked to Microsoft which throws away 90% of that power. When people discover how little processing power is really needed to do most things they will curse Microsoft for years wasted and move as quickly as possible to Linux based netbooks. Yes there is a hiccup. That is because until just recently you could not get a netbook without Windows. And it will take another year before the kinks have been worked out of anything other than simple tasks on a netbook. However if all you want to do is surf the web and do email, a linux netbook will do it quicker, safer and with much better battery life than a Windows laptop - by an order of magnitude.

  • Report this Comment On May 28, 2009, at 2:44 PM, mdkca wrote:

    I also could not disagree more. To say that Google's comments are killing the Netbook is the complete opposite of what I hear Eric is saying - "the browser is the computer".

    Most consumers use the browser for 95% of all computer activity if not more. Now that Google provides cloud applications, the typical household does not need the power of the PC becuase the intelligence and applications are in the cloud.

    I would go as far as saying that Netbooks someday will do nothing more than boot straight to a browser and only a browser with networking built. You just turn it on and go.

    Imagine a small device in the future that uses a 3d infrared keyboard projected onto a table which also projects your screen image on a wall.

    the computer is on a long slow death over the next 10 years in the consumer space even if my wild imagination is wrong.

  • Report this Comment On May 28, 2009, at 5:44 PM, TEBuddy wrote:

    How many people still have tube TVs and we still use incandescent light bulbs and so on and so forth. It will have to be a long slow death for PCs. They will be around because they are cheap. And there are more people around the world that dont have any of it yet. So yeah for you or me, we may get the nice new shiny toy that costs a lot, but we can't even coordinate a date to get off of analogue television.

  • Report this Comment On May 29, 2009, at 11:43 AM, forever4now wrote:

    Here is a cool HTML5 demo of Gmail, running on smartphones:

    http://www.youtube.com/watch?v=VmjxmOtNZCk

    The performance looks great, even on low powered ARM processors.

  • Report this Comment On June 03, 2009, at 7:11 PM, sommerTN wrote:

    I rarely feel moved to comment on any MF articles, but this one..... the author HAS to be shorting Intel. Netbooks aren't MADE to be anything but what they are, which is lightweight and easy internet access for people who don't have the money or the NEED for a high power machine.

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