I'm less convinced we're seeing the emergence of a truly distinct product category than the continued downward movement of not only notebook entry pricing, but entry bulk as well.
Earlier this year, I expressed my skepticism that Mobile Internet Devices (MIDs) and Netbooks (essentially scaled-down, low-cost notebooks) would come to pass as mainstream product categories. My reasoning boiled down to an assertion that these things were neither fish nor fowl. As usually envisioned, a MID is a form factor that is neither as portable as a smartphone nor as full-functioned as a notebook. A Netbook is a notebook that is underpowered and otherwise compromised.
I've seen nothing over the past few months to change my mind about MIDs. If anything, Apple's continued march with the iPhone and the work going on around Google Android have me more convinced than ever that the browser-equipped smartphone is the future of truly mobile computing. (There are a lot of interesting dynamics here related to carrier hardware subsidies and the desire of carriers to lock down and restrict use in various ways, but those are topics for another day.)
Netbook sales, on the other hand, have been strong. In fact, they're driving a lot of the worldwide growth in PC sales. So, are we, in fact, seeing the emergence of a new product category--something that doesn't happen very often?
We are seeing a lot of consumer interest in very portable computers that are economy-priced. Economy pricing is really what's new here. Historically, companies have paid big premiums to get the most portable notebooks for their road warriors with the goal being to give up as little function as possible in service of light weight (and, to a lesser degree, small size).
Some things about Netbooks do indeed look like a new category of product. The first is that a lot of the people purchasing these devices are individuals, not businesses. In many cases (especially in the U.S.), they're intended to supplement--rather than replace--another desktop PC or a higher-end notebook. A second thing is that, especially at the entry level, Netbooks tend to have differences of kind, and not just degree. They run Linux and Windows XP, not Vista. They're explicitly intended to access Web-based applications through a browser or to run some basic productivity software locally; they're not general purpose. And they use less power-hungry, but less powerful, processors such as Intel's Atom.
However, I wonder if the apparent bright line distinction from other notebooks isn't a temporary phenomenon that will soften over time. Memory gets denser, processors get faster, LCDs get cheaper. Some of these Moore's Law-fueled advances could indeed continue to push the entry level of the notebook market down in price. Perhaps we'll even have a $100 laptop that only costs $100 some day. But I strongly suspect that a lot of that technical advance will also go into beefing up the capabilities of notebooks in the sort of price band that a lot of consumer electronics sell for--say, sub-$500.
Ultimately, I'm less convinced that we're seeing the emergence of a truly distinct product category than that we're seeing the continued downward movement of not only notebook entry pricing, but entry bulk as well. Besides, however fond IT industry people are at chopping markets into named categories, as a fellow analyst said at a recent meeting: "the average consumer calls everything a laptop anyway."