PC Makers See Big Trouble in Smaller 'Netbooks'

Web-focused computers, starting at $300, yield little profit, may forecast trend
By Jim O'Neill,  Newser User
Posted Jul 21, 2008 11:22 AM CDT
New Acer Aspire one netbook, an all-new communication device designed to make online activities fast, simple and cool.    (Business Wire)
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(Newser) – Smaller and lighter than most textbooks, “netbooks”—the latest generation of computers used for light computing and surfing the web—are causing heartburn among PC manufacturers who see the low-cost innovation as a threat to already-slim profit margins, the New York Times reports. Perhaps more worrisome to giants like Microsoft and Dell is that the trend could signal a major industry shift.

The upstarts are challenging the notion that consumers prefer their machines come with built-in computing power rather than use what’s available online via so-called cloud computing. One Silicon Valley startup is launching a $300 “net-top,” offering basic functions while using a fraction of the electricity, and at a fraction of the size, of traditional desktops.