Origami: Flattened by Netbooks?

Two-and-a-half years ago, Microsoft launched Origami, or ultra-mobile PC, among great fanfare and criticism. The fanfare came from successful, viral marketing for a mystery product. Criticism was for pricing. Microsoft's price goal was $500 or less for the touchscreen, sub-tablet UMPC; but most OEMs delivered devices costing at least $300 more and many of them for above $1,000.

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I was skeptical of Origami from the start, because the half-notebooks came to market when laptop prices were free falling. In a March 2006 blog post, I warned that notebooks would likely compete with UMPCs, despite Microsoft's positioning them as a different category. Because JupiterResearch long ago took down the Microsoft Monitor Weblog, I must quote myself:

"As price increases, consumers will have good reason to compare Origami to portable computers. My 11-year-old daughter asked the right questions about Origami. She said, 'What can you do with Origami that you can't do with Tablet PC [or a notebook]? What can't you do with Origami that you can do with a Tablet PC or notebook?'

"As an Origami device's price approaches that of low-cost notebooks, trade-offs and perceived value could have greater impact on buying decisions. Is the consumer's priority smaller size (and so greater portability) or a keyboard, because, after all, Ultra-Mobile PCs and laptops run Windows? Planned contextual use, personal preference and budget are among the factors influencing the purchase decision."

Where UMPC failed to generate meaningful sales, netbooks are pulling in buyers. Similarities are striking:

• Screen sizes are comparable—typically 7 inches to about 10.2 inches, with UMPCs much smaller.
• Physical size and weight, typically under 3 pounds, are about the same.
• Both devices usually run Windows and often XP.
• Neither device typically has an optical drive.

But there are some big differences:

• Many netbooks do sell for under $500, while remaining UMPCs typically cost more.
• Linux-based models cost even less, often for under $300.
• Netbooks have traditional notebook-style keyboards; UMPCs typically use non-traditional, or touchscreen "soft" keyboards.

Way I see it, the keyboard is the differentiator. Netbooks offer most of the portability benefits associated with UMPCs but with a real keyboard.

The netbook category really started taking off after Asus released the Eee PC last year. In June, Market Intelligence Center predicted that worldwide netbook shipments would exceed 8 million units this year. That's pretty good for a virtually non-existent category a year ago. Gartner predicts 5.2 million units this year, reaching 50 million in 2012. Based on broader portable shipments for 2012, one in six laptops would be a netbook.

More recently, Intel Atom-based processors have further opened up the category. Processors and other components demand less power and produce less heat. Amazon offers more than 50 netbook models, something that sure surprised me. Many models sell for under $400. Pricey models sell for more than $600, but they're less common than those selling for under $500.

On Saturday, I looked over the HP 2133 Mini-Note PC at a local computer store. The screen was surprisingly sharp and the keyboard greatly tactile. I liked it. Specs: 8.9-inch display with 1280 x 768 resolution, 1.6GHz processor (Via not Intel), 2GB of memory, 120GB hard drive, Webcam, 2 USB ports, 802.11 a/b/g wireless, Bluetooth and more. The notebook measures 10.04 x 6.5 x 1.05 inches and weighs 2.8 pounds. The display model had no price listed. Amazon sells the Mini-Note, one of the priciest netbooks, for $743.99.

Now compare the Mini-Note to the Samsung Q1 UMPC, which has 7-inch display with 1024 x 800 resolution, 1.33GHz Intel Core Solo processor, 2GB of memory, 80GB hard drive, Windows Vista Business and non-standard keyboard (split on either side of the display). Amazon sells the Q1 for $1,079. But other retailers charge more. Discounter Buy.com sells the same Q1 model for $1,334.99.

An even nastier comparison is the Asus N10 netbook, which is available only for preorder from Amazon for $799: 10.2-inch display (1024 x 600 resolution) 1.6GHz Atom processor, 2GB of RAM, 320GB hard drive, switchable graphics (Intel GMA 950 and nVidia GeForce 9300M GS with 256MB dedicated graphics memory) and Windows Vista Business.

Both the Mini-Note and N10 sell for much less than the Q1, and they've got real keyboards, which are going to be more practical for more users. The N10 has 256MB dedicated video memory. Impressive. I purposely choose higher-priced netbook models for comparison with the Q1. As I stated earlier, many netbooks sell for $500 or less,

There are some people who might insist on UMPCs and netbooks being the same. I don't. Microsoft's UMPC concept included a touchscreen, which isn't a feature on netbooks. Then there was the missing keyboard. If UMPCs aren't finished off because of low-cost notebooks or netbooks, their end is coming quick. Or perhaps their evolution.

[Please send your tips or rumors to watchtips at live.com]

Related Posts:

• The Great Windows-Mac Laptop War, Microsoft Watch, Sept. 29, 2008
• Mac Laptop Retail Share: 35% Measured in Dollars, Apple Watch, Sept. 26, 2008
• Apple Demands a High Price to Be Cool, Apple Watch, Sept. 26, 2008
• Putting Mac Selling Prices in Context, Apple Watch, Aug. 8, 2008
• Vista PCs: These Prices Are Insane!, Microsoft Watch, Aug. 5, 2008
• Should You Pay Twice as Much for a Mac?, Apple Watch, Aug. 5, 2008
• Can Price Cuts Get Apple 10% Share, Apple Watch, July 23, 2008