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Intel rethinks Netbooks: 'Fine for an hour' but...

The smallish designs may not be the next big thing after all. Intel, whose Atom chip powers most Netbooks, says it now foresees mostly incremental gains.

The Netbook, take two: When Advanced Micro Devices said it wasn't going to focus on Netbooks, as Intel and its partners defined them, maybe it was on to something.

Intel is re-evaluating the Netbook market as possibly not The Next Big Thing. This from the company that makes the Atom processor and accompanying silicon that go into most of the Netbooks sold today.

HP Mini Netbook 1030NR: the next big thing?
HP Mini Netbook 1030NR: the next big thing? Best Buy

At a recent Raymond James IT Supply Chain Conference (streamed via this Intel page), Stu Pann, vice president in the sales and marketing group at Intel, said his company sees the Netbook differently now.

"We originally thought Netbooks would be for emerging markets and younger kids, and there is some of that. It turns out the bulk of the Netbooks sold today are Western Europe, North America, and for people who just want to grab and go with a notebook," Pann said. "We view the Netbook as mostly incremental to our total available market," he added.

And the most revealing statement? "If you've ever used a Netbook and used a 10-inch screen size--it's fine for an hour. It's not something you're going to use day in and day out."

Though this may simply reaffirm some people's view of the Netbook, it may also be surprising to others who thought the Netbook was potentially a laptop replacement for highly mobile users looking for a lightweight design. Or at least a design that was bearable beyond one hour.

Enter AMD and its take on the market. Though it won't resist if computer makers use its upcoming Huron and Conesus CPUs (one of these is due early next year) for Netbook-like designs, its focus is on ultrathin laptops similar in build to the 13-inch MacBook Air (and even 14-inch designs) but at a much lower price point.

AMD Chief Executive Dirk Meyer said earlier this month that "we're ignoring the Netbook phenomenon--just thinking about PC form factors above that form factor." And Bahr Mahony, director of notebook product marketing at AMD, said at that time that there are "a fair number of people" who are not satisfied with the experience they're having with Netbooks.

Mahony added that the dissatisfaction with Netbooks "has been exhibited by the high return rates that have been seen on these mini notebooks" in Europe. (AMD uses the terms "Netbook" and "mini notebook" interchangeably.)

AMD believes that the Netbook screen size is too small and the performance disappointing.

The coming year should show whether the Netbook has legs or whether it was just another marketing flash-in-the-pan like the UMPC (ultramobile personal computer) before it.