Last Gasp for Netbooks as Asustek & Acer Pull Plug

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A Pauper's Grave A Pauper's Grave

That wheezing sound you hear is the last gasp of the once-beloved netbook. Asustek and Acer, the last two major OEMs still making netbooks, will both stop making devices in this category at the end of this year.

Netbooks were once the golden future, or at least the 10 karat white gold plated future, of the PC world. In 2009, it was the one PC segment showing mad growth, and it was netbooks that helped propelled Acer and Asustek into the spotlight as major PC makers.

Indeed, so popular were netbooks, Calyon Securities analyst Shebly Seyrafi issued a downgrade on Apple's stock for the Cupertino company's lack of a netbook strategy in 2009.

He said, and I quote with glee, that Apple, "has not shown a convincing strategy of how it will play in the netbook market without cannibalizing [its] existing MacBooks."

$AAPL was trading in the $90 range at the time. He downgraded the stock to "Underperform" and lowered his price target to $95. That Mr. Seyrafi was one prescient son of a gun. With $AAPL's recent bear contraction, the stock has risen just 568 percent since that day. If only the company had released a netbook.

But no, Apple's current CEO Tim Cook and then-CEO Steve Jobs said repeatedly that they didn't think netbooks were pleasing customers. More specifically, Tim Cook said:

"We're watching [the netbook space]. Right now from our point of view, the products in there are principally based on hardware that's much less powerful than we think customers want, software technology that is not good, cramped keyboards, small displays, etc."

This came out a few times, as analysts pestered Apple for a netbook response. In April of 2009, I went so far as to correctly (and brilliantly) posit that Mr. Cook was saying specifically that Apple would compete with netbooks by releasing "an iPod super touch." It was called an iPad, and it was announced in January of 2010 and it shipped in April of that year.

Cut to the end of December, 2012. DigiTimes reported that Asustek and Acer were both pulling the plug on netbooks. Between pressure from iPad and competing tablets, as well as the general rush-to-the-bottom led by companies like Acer and Asustek, the reality is that no one wants a netbook.

You can get a full sized, cheap, bulky, and ugly PC notebook for little more than a netbook, and for the same price you can get a tablet. Apparently it was a clear choice.

And just like that, no more netbooks.

Good riddance. They were cheap devices that epitomized what happens when innovation is replaced in the PC space by cost-cutting. And just in case it needs to be said, Apple called this one correctly, and the entire rest of the PC industry got it wrong.

Image made with help from Shutterstock.

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3 Comments

Brian Grishaber

Still have my Dell Mini 10V purchased in 2009, although it didn’t keep its Windows XP look for long as I immediately hacked it and started running OSX 10.5 Leopard on it.
It still runs Leopard and I use it every now and then.

wab95

Bryan:

What strikes me is that, despite the fact that Apple called this spot on in the face of universal industry opprobrium, certain pundits and analysts continue to censure Apple when they deviate from conventional wisdom.

I’m certain that I see one or two more wheezers, with early signs of congestive heart failure, in that morbid queue.

Yes, I’m looking at you, Surface.

Bryan Chaffin

Brian, it’s a fair point that certainly some people have enjoyed their netbooks. How does your device work out as a hackintosh?

wab95, one interesting aspect about Apple, or more specifically $AAPL, is that many of the band wagon jumping Wall Street analysts didn’t understand Apple any better when they were putting Buy ratings on the stock as they do when they express more bearish opinions. There are a handful who really, really get it, another score+ who mostly get it, a dozen who only get the numbers, and then a couple of crackpot outliers.

In the score+ and dozen group are many analysts who are much more comfortable in a market dominated by the open licensing paradigm.

And then there’s Mr. Ballmer and his toaster fridges.

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