TechPulse 360

The mini is H-P's latest netbook. But will consumers keep it?

Rumour goes that half of all netbooks are being returned back to their manufacturers.

Early last month, Taiwanese PC maker MSI revealed that returns of netbooks was higher than regular notebooks, primarily because of Linux unease; Linux netbooks return rate was at least four times higher than Windows XP netbooks. And that’s “because they weren’t positioned properly in the first place,” says Roger Kay, President of Endpoint Technologies Associates.

“Netbooks are appropriate only for email, chat, browsing, shopping, information gathering.  Unfortunately, the killer application for consumers is video, and these things aren’t up to it,” confies Kay.

Intel Atom processor will always be a low performer to avoid cannibalizing its high-end chips

The analyst adds that netbooks are not just cheap notebooks; they’re a different class of machines. “And Intel wants to keep it that way because its higher priced, higher margin parts optimized for performance would otherwise be cannibalized,” prompts Kay.

So, are netbooks real? Sure there are according to Kay and one big driving factor is Intel’s Atom. “In order to make these new parts pay, Intel has to drum up a lot of volume for them.  But PC hardware OEMs [like Acer, Asus, Dell or H-P] are also seeing a way to keep the flow of consumer notebooks going with lower price points,” says the analyst.

There’s little doubt netbooks will be a hot item this holiday season. But the multi-billion dollar question is “will consumers keep them after being disappointed by their performance?”