Two of the industry's biggest PC makers, HP and Dell, are reportedly cutting back on investments in 10-inch netbooks.
HP may even quit the 10-inch business altogether to focus on 11.6-inch netbooks powered by AMD processors, according to DigiTimes. The report cites only unnamed "sources from netbook makers."
DigiTimes says profits from netbooks based on Intel's latest Pine Trail platform have been lower than expected. Pine Trail, which includes the Atom N450 processors, gave the latest netbooks better battery life while improving performance by combining GPU and CPU on a single chip. But it seems the extra power didn't provide the sales boost manufacturers were hoping for.
The original big shots of the netbook category, Asus and Acer, plan to stay active in the market, along with Samsung. Smaller companies and "white-box netbook vendors" -- those who build the machines and slap a better-known name brand on top -- have already backed off the market, DigiTimes says.
It's not as if this is a bad thing for Dell or HP. Market researcher The NPD Group recently reported that desktop PC revenues and unit sales are climbing, possibly due to Windows 7 and the increased popularity of home theater PCs. Meanwhile, NPD noted, PC makers are finding success with sub-$400 notebooks, which nearly outsold netbooks in February.
Netbooks might be looking like an increasingly hard sell, especially when bundled with the feature-limited Windows 7 Starter. And with Windows XP on its way out consumers might be more willing to opt for a basic Windows 7 laptop instead of an underperforming netbook.
There is, of course, the tablet wild card. HP and Dell are both developing touch screen devices that aren't phones (HP has the unnamed slate, and Dell has the Mini 5), and it's possible they want to focus more energy on this new category to avoid falling too far behind Apple and the iPad. Given that netbooks have stagnated lately, and there's so much potential in tablets, I'm not complaining.
