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The Choice For Your Business: Netbook Or Smartphone?

Consider the details before your company invests in a new netbook vs. a smartphone.

Opinions expressed by Entrepreneur contributors are their own.

Paul Korzeniowski

"The netbooks are coming, the netbooks are coming, the netbooks are coming." That cry is being heard from many market research firms. The pundits think that these low-cost, portable devices offer so many attractive features that they'll soon displace smartphones. So how much attention should your company give to the emerging devices? Not too much, at least for the moment.

ABI Research became the latest market researcher to project quick acceptance for netbooks. The firm expects unit sales to increase from 35 million in 2009 to 139 million in 2013. So the question becomes: What is driving such lofty expectations?

Netbooks represent the latest attempt by manufacturers to drive down the cost and size of their devices, so they become a more convenient option for users. These products typically weigh a couple of pounds and come with about 1 GB of RAM, a 16-GB SSD, and a 9- to 10-inch screen. Their communications options include an Ethernet connection, a Bluetooth link, and a Wi-Fi port.

Cost is the big difference between these devices and traditional tiny laptops. Typically, users paid a premium (pricing often started in the $2,000 range) for lightweight systems, so sales were limited to top executives or salespeople. Recent advances in microprocessor technology -- which now comes in low-cost, low-power-usage form factors, as well as increased capacity in devices, such as SSDs -- has enabled vendors to deliver low-cost, high-function laptops. Netbook pricing ranges from $300 to $600, and the portable systems are geared as much to consumers as they are to the business market.

The new focus is the main reason market analysts are so bullish about their potential, and their grandiose expectations have attracted a bevy of suppliers. Acer, Asustek, Dell, Hewlett-Packard, Medion, MSI Computer, OLPC, and Samsung are among the vendors building netbooks. Some of these suppliers began shipping their products in 2008 and anticipate a huge uptick in interest this year. ABI Research supports such thinking and postulates that the use of smartphones has helped educate users about the benefits of mobile communications. However, the market research firm added that these devices have failed to deliver on their promise of providing rich Internet experiences, and netbooks are well suited to fill that void.

But the emerging devices do have their downsides. They may be too small to be used by executives, with tiny, often cramped, screens and keyboards that can be difficult to operate. Also, the devices are new and seem to be suffering through some of the trials and tribulations found with nascent technologies. There have been reports that the rate of return for the devices has been much higher than standard notebooks. Biz360, a market intelligence firm, found that netbooks generate a 40% lower approval rating from consumers than other laptops do.

The new devices seem to be experiencing mechanical problems. In some cases, features such as wireless connectivity have not been operating as advertised. Another problem is netbooks' features are falling short of user expectations. They expect a full-function notebook but often find that the device is only suited to basic computing capabilities, such as e-mail and Web browsing. When the limitations become apparent, they return the systems.

If that is the case, why would a small or midsize business buy a netbook? A provides the same features, has fewer bugs, and fits in your pocket, while a netbook is often placed in a briefcase. Also ABI claims that smartphones haven't met most users' expectations, but the market research acknowledged that handset suppliers shipped more than 171 million smartphones in 2008, which is more than the projected total of netbooks in 2013. From those numbers, it would seem that customers are quite satisfied with smartphone features and not pining for a replacement.

Netbooks represent an interesting development in the laptop space, but the talk of their being a revolutionary technology seems overstated. They should appeal to users who need a simple, inexpensive (keyword) laptop. Right now, they don't appear ready to displace smartphones. Also, given the kinks with the first-generation products, it would be wise for small and midsize businesses to wait awhile before trying to see how these devices can be integrated into their operations. In sum, the netbooks do not seem to be coming to small and midsize businesses -- at least, not yet.

See more columns by Paul Korzeniowski.

Paul Korzeniowski is a Sudbury, Mass.-based freelance writer who has been writing about networking issues for two decades. His work has appeared in Business 2.0, Entrepreneur, Investor's Business Daily, Newsweek, and InformationWeek.

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