Intel: Some Netbook resellers saw 30% return rate

Chipmaker's marketing chief speaks of "very high" return rates of Netbooks last year at some retailers.

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
Brooke Crothers
2 min read

Netbooks had a rocky start last year in some markets, Intel's marketing chief said at the Intel investor meeting Tuesday.

"In the first period--June, July, August of last year--there were some in the retail channels that were shipping (Netbooks) as notebooks," Sean Maloney said in a question-and-answer session that was streamed over the Web. "They were running ads that had a continuum of notebooks and had this Netbooky thing in there--it was called a notebook. They had very high return rates and a couple of these guys had return rates in the 30 percent range, which is a disaster."

Maloney continued. "So we gently went back to some of those chains and said if you segment them differently and state up front what they do and don't do, things will be healthier. You've seen some of the European channels saying this (Netbook) product does not do X and being very black and white and very clear."

Intel's marketing chief Sean Maloney showed this slide Tuesday and did a live demonstration showing what a Netbook can't do.
Intel's marketing chief Sean Maloney showed this slide Tuesday and did a live demonstration showing what a Netbook can't do. Intel

At the investor meeting, Intel demonstrated on stage the performance gap between a Netbook and a mainstream notebook. In the demonstration, a Netbook and a notebook ran the same high-definition video of the NBA basketball playoffs. The video on the Atom processor-powered Netbook was jerky and dropped frames, while the Core 2 chip-based notebook's video was smooth.

The point was obvious: the Netbook's Atom silicon falls short in performing some tasks that a mainstream notebook handles with relative ease.

Along these lines, it also became clear at the meeting that there is a struggle brewing to clearly define to consumers the difference between Netbooks and upcoming ultra-thin notebooks, also referred to as the Consumer Ultra-Low-Voltage or CULV category of laptops. CULV notebooks--due in June--are expected to be priced in a market segment just above Netbooks.

Intel executives were peppered with questions from the audience--mostly representatives from Wall Street firms--about Netbooks. One audience member wondered whether Intel "had considered doing an informational advertising campaign" and asked: "Do you find that at all necessary to clear up some of the misapprehensions about what you can and cannot do with these devices (Netbooks)?" This question elicited the response from Maloney quoted above.