(This article was originally posted for our Tech.pinions subscribers on Nov 12, 2015. We are reposting it today to give you a sense of the type of content we are providing to subscribers. We encourage you to visit this link to subscribe.)
It’s not something I talk about often, but I was right in the middle of the Netbook debacle. The Netbook category was an accident. It was not Intel’s intention to have a small, not very powerful, yet cheap “PC” enter the marketplace. Asus took a chip Intel wasn’t positioning for a clamshell form factor and made a tiny PC that ran Linux. While initial sales of this product were not large, other OEMs caught on and wanted to ship Windows on it. Both Intel and Microsoft thought this was a good idea to get new hardware onto the landscape but both of them prefaced this thinking with the caveat that these machines could not be “full powered” PCs. Meaning it needed to be clear they could not do everything a full powered PC can do.
From the outset I told both companies, in my analysis notes to them, this was a bad idea. It would uncover the dirty secret that most consumers do not do very much with their PCs. My firm had just done some dedicated research on PC behavior in consumer markets and the data we discovered at the time gave us the insight that consumers, on average, use five pieces of software regularly on their PCs and none of them were CPU intensive tasks. My fear was these machines would be viewed as good enough for most mass market consumers and threaten the PC category as a whole with steep ASP declines. No one believed me. Sure enough, the chips got a little better on Netbooks, enough to watch good quality videos without skipping, for example. Microsoft eased up and let more of the capabilities of Windows on the hardware and boom, 40m devices at its peak of PCs under $200.
To add some perspective here, note on this chart of PC sales sliced by consumer and enterprise PC sales, the peak year for consumer PC sales also was the same year Netbooks peaked.
Microsoft and Intel reacted quickly to this, with the help of some smart guidance, and brought this back under control and essentially killing the category. But what the Netbook fiasco did was let the cat out of the bag — consumers are not pushing the limits of their PCs. They are doing simple things like watching movies, browsing the web, checking email, messaging friends, etc. They aren’t creating the next major novel, they aren’t exporting cells from Excel. They aren’t making a two hour Hollywood motion picture. Their needs are simple and the Netbook, an underpowered, small, cheap, internet connected, clamshell PC was good enough for them.
I tell you this because it applies to how I think about the positioning of the iPad Pro and the Surface Pro 4. No, I don’t think either of those products are anything like the Netbook. Quite the contrary. However, both represent the needs of and an opportunity for two different markets. The Surface brings all the things a hard-core, technologically literate PC user needs in an ultraportable form factor. You can do everything a tech literate can and push the boundaries with computing tasks those users want. You can plug it into an external monitor and do even more. The Surface is a PC and exists as a form factor option for those who know how to use and drive a PC like a pro. But remember what I said about the Netbook. That PC user, who can drive a PC like a pro, is not the mass market. Not even close. That’s where I’ve always felt the iPad comes in.
The iPad is certainly more powerful than a Netbook and the software much more capable than ever it was on a Netbook. However, a central question I was wrestling with during the brief Netbook era was, why are consumers not doing more with their PCs? Even those who had a top of the line notebook or desktop in that era were still only using a small fraction of its capabilities. What I uncovered was they simply didn’t know how. The PC was too complex, too burdensome, they were afraid of breaking it then having to spend hours on support trying to fix it. For many consumers we studied and surveyed at the time, they did not have positive things to say, generally, about their PC experience.
Then, the smartphone hit the scene. The harsh reality is mainstream consumers do more with their smartphones to utilize their max capabilities today than they ever did with their PCs, then and now. I think this is a tragedy. Not because of all the things they do with their smartphone and not a PC, but because humans are capable of so much more with digital tools and creativity. Yet most don’t engage in it. Hardware and software companies need to give consumers the tools to easily, and I stress easily, use these tools to their maximum potential. Desktop operating systems, like Windows and OS X, are for the professionals. Mobile operating systems are for the masses. The promise of something like the iPad and the iPad Pro, and even where Android can go on tablets, or laptops, or even desktops, is to empower the masses to do MORE than they can on their smartphones with a computing paradigm that focuses on simplicity but still yields sophisticated results.
Great article Ben – I think this is why ChromeOS works so well for me … Simpler cleaner // After reading your article it makes me think my Chromebook is now my “mobile” device and an iPad Pro could become my desktop !
Really well done. Fantastic!
I think this just highlights ‘justice done’. Consumers that did not need a full blown PC, still had to buy a full blown PC to do anything. To me, this is gouging the customer. You’re absolutely right, and we’ve said this before, the Netbook opened the customer’s eyes, and tablets were the natural evolution of the netbook, not the entire PC category.
Though netbooks were full blown PCs, they were really lousy full blown PC, but boy were they cheap. For the most basic of tasks they worked, and functionality lost on tablets wasn’t noticed.
I agree with what you say about Surface versus iPad Pro (any tablet really). This is bound to annoy some, but it’s the Surface that’s the PC, as you so clearly highlighted. The ‘Personal’ in PC is not only ownership, it’s as importantly about owner control. Contrasting the PC to the mainframes it replaced, it is a double acronym. It’s not only ‘Personal Computer’, it’s ‘Personal Control’. This is the central point of why I so adamantly oppose the notion that ‘mobile devices are PCs’ I find it factually dishonest and manipulative. So what if ‘most people don’t need a PC’, it doesn’t change what a PC is, it’s moving the goalposts.
There are successful attempts to return us to a more mainframe type model best exemplified by the cloud, and the iOS ecosystem as well. There’s a place for that, but it too is riddled with manipulation, buzz, and hype.
I submit to you that the mobile phone is both necessary and constitutes the lowest common denominator computer. It’s the computer you always have with you. Mobile has raised the average, and that’s a wonderful thing, but a PC it’s not, and that inhibits more well versed users. Those users will have PCs, as you point out.
I think it is obvious to even the mildly observant that MS, likely out of necessity since they can’t get any other mobile traction, is leveraging their Windows/PC brand to appeal to the people who are already comfortable with PCs. That may be a lot of people, maybe even enough for whatever market goals MS has for Surface. But I don’t believe it is enough to make or keep Windows the consumer brand it may have once enjoyed by default.
The problem with the Netbook was also it’s form factor implied capabilities it just didn’t have. The advantage of the iPad is it’s form factor has no such implications. And, because of that, it lends a certain appeal to the notion of discoverability. Apparently an important enough quality that MS/Intel are using it in their latest advertising campaign.
“why are consumers not doing more with their PCs?”
What more was there to do that they didn’t know how to do it on a PC?
Joe
Meanwhile the iPad Pro launched today but availability for the Pencil and Keyboard is 4-5 weeks out! Ouch!
Also, an unpopular opinion for sure, but they should have been included at the price they’re charging. MS got flack for the same thing, and they did include the pen at least. That may have delayed the launch by 4-5 weeks, but it would have shipped ‘complete’.
The pencil would be the only reason I would buy the iPad Pro, and that’s only if it’s truly sensational.
I think you’re not thinking clearly about the bundled accessories issue.
For someone who wants an ultra mobile workstation tablet for doing MS office type stuff on the go, the keyboard dock is mandatory and the pencil is useless. But for someone who wants to use it for drawing and painting, the keyboard dock is superfluous and the pencil is mandatory. And for someone like me whose ipad lives on the coffee table and gets used as a consuption device when I’m lazing on the couch, if I should decide I need a bigger screened ipad for any reason (deteriorating eyes, desire to read digital comics without having to constantly scroll/pan/pinch) both dock and pencil are superfluous.
So breaking both accessories out as separate purchases was the correct call for apple to make.
The two biggest functional differentiators for this product are a) Screen size (okay got) and b) the pen (no got). Speed is evolutionary. Keyboard is an artificial necessity, because no other keyboard will fit (for now). These are the purported ‘Pro’ features, a coffee table use is not typically a ‘Pro’ use.
This device is the closest I would ever come to buying an iPad, and it would be for the pen alone.
Anyway, I have no doubt Apple is correct and is doing what’s good for Apple, I’m across the table on that negotiation. Would you complain if they at least bundled the pen?
“These are the purported ‘Pro’ features, a coffee table use is not typically a ‘Pro’ use”
I forget who pointed it out (Gruber maybe) that Apple’s use of “pro” has bifurcated. For desktop macs, “pro” means exclusively professional (if you need 8 or 12 cores and scads of GPU compute, buy it, otherwise stay away). For laptop and now ios, “pro” has come to mean something like “deluxe” – bigger, more powerful, of interest to professionals who always need all the power they can get, but also of interest to consumers who simply want to pay extra for the extra benefits.
Yes, I would mind if they bundled the pencil, because they would charge extra for doing so and then I’d have a pencil I had no use for but had to pay for. MS bundling the pen with their surface says “you need this in order to use this.” Apple not bundling it says “you don’t need this to use it, but if you want it, it exists”
I meant at the same price, as MS does with the Surface. Yes, I do mean Apple eating the cost. At the price of this device, I think it’s unreasonable that it’s not included (IMO).
You don’t need the pen to use the Surface if you have the keyboard. They too got slammed for not including the keyboard. I don’t disagree, but there too you have keyboard choices.
“I meant at the same price, as MS does with the Surface.”
You must know that that isn’t how Apple rolls.
And, for me, it’s a ding against them.
“for me, it’s a ding against them.”
Yes, it would be for you. You are not everyone.
PS, You realize, of course, that MS isn’t offering the surface at the “same price” with a stylus — it being included increases the surface’s price, and the surface would be cheaper if MS did not include it.
The reason the stylus is included is of course that the Windows ecosystem (the only reason to buy a surface instead of some other tablet) is not touch-optimized, so you *need* the stylus.
Whereas IOS ecosystem *is* touch-optimized, so the pen is not necessary *unless* you wish to a) make notes or annotations on the screen, or b) draw. Therefore, it is an optional purchase.
You don’t see me defending MS, do you? I do think they’re better speced for a given price. other OEMs, even better.
I repeat, you do not need the stylus on the Surface Pro, or the Surface Book. The touchpad works. Still, I would love to see them drop the price, perhaps they should.
“you do not need the stylus on the Surface Pro, or the Surface Book. The touchpad works.”
You saw where I called it a tablet, right? In short, because the Windows ecosystem is not touch-optimized, and the OS is only sortof touch optimized, you *need* either the dock, or the stylus. You can’t actually use the surface as a simple tablet with neither one. But the Ipad pro *is* touch optimized, both OS and ecosystem, so you *can* use it as a simple accessoryless tablet. WHich is why the accessories for it are optional purchases. Some people will want one, some the other, some (maybe not a lot) will want neither.
“Still, I would love to see them drop the price,
perhaps they should.”
And if they drop the price, then how will they pay all the engineers who worked so hard to make it the exceptional device that it is? There’s a reason why premium devices are expensive. There’s a reason why inexpensive devices tend not to be all that well designed or engineered.
As I’ve said in comments on this site before, it’s not that Apple devices are overpriced, it’s that the rest of the computer industry is massively underpriced. You can’t afford to do innovation when you’re clearing 1% or 2% per sale (which is why Intel’s chips are marked up so radically… and why AMD, whose chips are cheaper, has not been able to make better chips than Intel does despite almost a decade of trying). You can’t do customer service when you’re clearing so little (hence the way the computer industry has embraced the customer disservice model of outsourcing call centres so eagerly). You can’t live without infecting your customers’ computers with crapware and malware when you clear so little. You are in constant danger of going belly up when you clear so little.
Sure, MS’s Surface pros are modestly cheaper than equivalent Apple notebooks (because you’re getting a tablet that can pretend to be a notebook instead of a real notebook). There’s a range of prices that are high enough to pay for all those things the clone makers can’t afford nowadays. However, each and every step towards lower prices (other than passing on savings from lower supplier costs) seems reasonable and correct, and yet the road ends with the company up against the wall trying to avoid bankruptcy or acquisition. Apple survived and thrived, unlike all the other clone makers of the late 90’s (IBM – sold their PC line, Compaq – bought, Dell – went private, HP – trying to figure out what to do with their PC line, Gateway and the rest – DOA), because they refused to get on that road and held the line on their premium prices.
Of course Apple has to pay the engineers. Duh. This isn’t some rock bottom priced device though. They look after their interests, I should look after mine. They charge what they believe to be reasonable, I pay what I believe to be reasonable. That goes for anything.
Sometimes we pay for things we don’t find reasonable too. Ask any cable subscriber. This is about where we set our expectations. If I buy a salad, I do expect to get dressing with it…
“You can’t actually use the surface as a simple tablet with neither one.”
False. I am reading and responding to your post sans a dock or pen. I can do everything on my SP2/SP3 that an iPad can do. If I need to do work, that is when I need the dock. The pen is only used during meetings.
“False.”
You quoted me out of context. I said: “because the Windows ecosystem is not touch-optimized… you *need* either the dock, or the stylus. You
can’t actually use the surface as a simple tablet with neither one.”
Note the bit at the start about the app ecosystem. I am sure that your SP can surf the web just fine without a dock or stylus. Can you use whatever Windows app you desire, from the huge Windows ecosystem, without the dock or stylus? Not without filing down your fingertips.
The entire raison d’être for buying a Surface is to be able to run the vast back catalog of Windows software going back 20 or 25 years. That’s why MS stopped updating the non-pro version of surface: nobody wanted them. And that back catalog of software is designed for mouse and keyboard, not for touch. Which is why the stylus is bundled with the surface — because you can’t use the surface for its intended purpose without it.
“Can you use whatever Windows app you desire, from the huge Windows ecosystem, without the dock or stylus?”
As a simple tablet – yes, with Win8 Metro UI or Windows 10 tablet mode I do not need to follow your suggestion to file down my fingertips nor use a dock. The Windows store has all the touch friendly apps I need – Netflix, Facebook, Skype, to name a few. When I use my SP2/SP3 as a tablet, I am either on my couch having it rest on my lap (not as a laptop) using touch exclusively (like an iPad) or when I write notes in a meeting or do art drawings with my kid (like an iPad Pro). Yes, that back catalog you mention need a mouse and keyboard, but then my SP2/SP3 is no longer a tablet but a desktop/laptop replacement.
“The entire raison d’être for buying a Surface is to be able to run the vast back catalog of Windows software going back 20 or 25 years. That’s why MS stopped updating the non-pro version of surface: nobody wanted them. And that back catalog of software is designed for mouse and keyboard, not for touch. Which is why the stylus is bundled with the surface — because you can’t use the surface for its intended purpose without it.”
The non-pro Surface was a perfect tablet when used as such – it may not have all the apps as the Appstore but it has the necessary touch apps to be used as a SIMPLE tablet. My intended use for the Surface is to be a tablet, a note-taking device, and a desktop/laptop replacement and it succeeds with flying colors.
So yes, even with context, your statement that a Surface can not be used as a simple tablet without a pen or dock is false.
In addition, the prescience of USB3 and card slot, and Nvidia Graphics on the Surface Book…
No, you don’t need the freaking dock, as it has a touchpad. It even has a usb port so you could plug in an external mouse.
So much ignorance in your post. Windows IS touch optimized, and Surface Pro includes the pen at the same price.
I’ll join the chorus of saying this a fine article/commentary.
It confirms most of my suspicions.
When not “on task,” I prefer using my iPad. I can sit on the couch, cat on my lap, with music or TV on in the background. Comfortable and simple. Why fire up a tricked out Mac tower system when I’m just reading/writing email, casually surfing, or the checking the weather?
The article confirms what many of us had suspected for a long time.
The one thing I would add is; consumers always wanted their PC to work like an appliance (think mixer, microwave), something that you could switch on and that would always work immediately and as expected. Instead, they had to contend with unintuitive PCs and their mule-like temperament.
You could compare it to cars. The average driver in the 50s/60s needed some understanding of car mechanics to keep it running. Modern cars (like Android/iOS), instead, are meant to be driven without ever looking under the hood, allowing the driver to focus on their daily business.
Ever since the debut of the original Mac 1984, that’s always been SJ’s philosophy – the computer for the rest of us. I think the iPad Pro represents the culmination of that vision started 30 years ago.
Most consumers, yes, but certainly there is a large minority of people who use computers professionally or who need to type easily. Those people need a more powerful OS. And I would argue that modern desktop OSes by and large just work.
I would appreciate it if you could clarify some history for me.
I had always thought that Microsoft’s and Intel’s approach to Netbooks were a response to potential low-end disruption.
Early on the Netbook boom, DELL sold Netbooks running Linux. At that time, Linux was the single, largest threat to Microsoft. Desktop Linux had also quickly matured and was mostly sufficient for people who were mostly using browsers and could get by with open-source alternatives to MS-Office. Microsoft responded swiftly and effectively, snubbing out the only real chance that Desktop Linux ever had.
Similarly, if Intel hadn’t provided the cheap Atom CPUs for Netbooks, AMD would probably have done so. Intel had followed Christensen’s advice once before, and they were following it again.
Hence if Microsoft and Intel hadn’t embraced Netbooks (albeit in a limited way), they could have faced a far worse outcome where AMD-based Netbooks running Linux could be eating into the PC market.
I had always thought that their response was both a good example of A) how companies should respond to low-end disruption, B) how even with the best response, the incumbents are screwed anyway.
Of course, learning from Apple, we can now discuss a new and better way to respond.
Being that PC were oversold, they were bound to be screwed. The didn’t have a proper mobile chip, and the Atom, running a ‘full OS’ was torture for anything other than the rudimentary. The iPad HAD to run a watered down version of OSX, running on relatively energy efficient, but slow, ARM cpus.
Even now, with the A9x, the only real way (and still not 100%) to benchmark it is to build identical PCs, with a common OS, then benchmark. Geekbench, through no fault of theirs is not a 1:1 correspondence. A Windows PC and a Mac still run several services, and keep alive several more devices. These eat up CPU cycles. You can go faster, if you do less.
So, in the end, the low performance, simple task, end of the market went to mobile. Needless to say, since mobile was always going to be in the picture anyway, for all users, mobile hurts PC sales. And that’s just fine.
Had Intel made a true ARM competitor in mobile, they could have had their way.
I think Intel did briefly dabble in ARM. However, ARM would have been disruptive to their own main business. They were making good money by owning the x86 architecture, and I doubt that they could ever earn the same profits from ARM.
I think it shows how difficult self-disruption is.
Intel sold off an ARM based asset called X-scale. Which they acquired from DEC under the StrongARM brand. Intel sold it Marvell.
It’s a sound observation from the outside looking it but not at all the reality with what happened. Countless hours of strategy meetings went into to trying to control this and then reverse the course back to full fledged PCs.
We all knew Linux was never a threat and further the returns of linux based netbooks were through the roof. Exit surveys discovered consumers thought they bought a PC and realized it wasn’t when they got home. If Microsoft never let Windows on them the category would have immediately died. Sales of the Linux machines were exceptionally small. It wasn’t until Microsoft allowed some versions of Windows to run that the category actually took off. The honestly thought people would realize they couldn’t’ do all the things they wanted and it would go away. Not sure if you recall but they got retailers to even put on the retail signage that it was “not a full PC” and list things it couldn’t do.
But as I said consumers were content because it did enough and it was cheap.. Retailers also embraced it begrudgingly. They don’t want to sell $200 PCs. The whole thing was a giant fiasco and fun to have an inside look but the entire ecosystem was freaking out.
Very interesting, thank you.
So if I understand correctly, Microsoft initially decided not to block Windows on Netbooks, but this was not because of any perceived threat. Was it because they saw the potential to sell more, without cannibalising laptop sales? Was it because they expected Netbook users to upgrade to full laptops sooner or later?
If so, I’m struggling to find where they got that idea.
The did actually try to not allow Windows on it. At first they told OEMs no. Then they allowed only certain versions on Netbooks and started deciding what version they can ship based on screen size.
The category gained steam and the momentum made it hard for both them and Intel to further intentionally criple the category.
Interestingly, people were not replacing their existing laptops with Netbooks. Rather they were becoming an extra Internet machine in the house. Keep in mind not everyone owned a smartphone then and yet everyone wanted to be on the Internet at the same time. So a netbook made for an cheap second, third, forth, etc, web browser in the house. This knowledge we gained about how they were being used was a major reason we knew tablets had legs.
I distinctly remember Ultrabooks being introduced a bit after Netbooks, and positioned as “the real lightweight PC you want to take with you”. Every analyst saw them for the blunt upsell they were.
Price put netbooks in a different category though. Before tablets, I was giving away/recommending Netbooks like candy, to be used once in a very long while. 5-6 years ago I bought one for my sister to stop her haggling with hubby about who would get the laptop to work on during the long train ride home. Then this summer they went into crisis mode when they couldn’t find it before leaving for their holiday. I didn’t even think the thing was still around. Ditto my own netbook: it gets used 2x a year, mainly as a media server since it got a 2TB HDD, but it can also play single-player (no raiding) World of Warcraft and Total Annihilation competently. Civilization 5 only runs on my real laptop though.
I think what sellers are missing is that it’s not so much about size, as about price making it possibile to have a machine for utterly occasional use.
I think you’re going into the paradox of “less is more”.
Unfortunately, humans find it easier to see the “less”. Seeing the “more” is hard unless we have seen a few privileged people like your daughter, actually experiencing the “more”.
iPads initially sold well based on the “less”, but “less” can only take you so far, as Netbooks have shown us. It’s taking a much longer time for a large enough population to see the “more”.
the sad reality is that as we speak, children are doing a lot more with their Chromebook at school than they would with an IPad that was suppose to replace it hence the question one need to ask is why should we choose the IPad instead?
As far as I know, that is not the case.
“The promise of something like the iPad and the iPad Pro, and even where Android can go on tablets, or laptops, or even desktops, is to empower the masses to do MORE than they can on their smartphones…”
So is it safe to imply that we may see laptops / desktops that are iOS-based?
I think a scenario still exists where those form factors are for the specialists. At leat for a while. Just a pretty small market overall. The masses will use mobile platforms on larger screens.
Great thing is, you don’t really have to choose. My next tablet will dual-boot Android and Windows, so I’ll get the best of both worlds: a nice 11.6″ tablet that I can occasionally convert to something that’s closer to a low-end laptop than to a netbook (4GB RAM, 128GB storage, 1080p, Atom x5) .
For $280, too… I just might get 2 of them ^^
The harsh reality is mainstream consumers do more with their smartphones to utilize their max capabilities today than they ever did with their PCs, then and now. I think this is a tragedy @benbajarin:disqus
do you have some evidence to back this claim?
because if you take a closer look to the reality you will notice that the vast majority of user aren’t using their Smartphone capability more than they did their PCs, using messenger, Facebook, YouTube, Instagram, or playing more game on mobile phone than they would on they PC aren’t equal to using the phone capability more. a simple observation.
I think it’s more about the ability of the device than the usage of the user. Smartphones are powerful, but they still can’t match a PC for functionality, so the same usage on a phone gets closer to the max than on a PC.
Well written article.
Like most people, I only used a PC and it was all I needed. Then when I spotted a few opportunities with work issues to buy an iPad, an entire world opened up. In addition to the portability and having data at my finger tips, it simply just worked. Instant on. Never crashes. Intuitive (which is good because the only instructions were a 3×5 card).
I still use a PC (but also have a MacBook) but the PC is for very specific tasks. I do not look for the “killer app” with the PC, but with the iPhone and iPad, I happily add those apps when I see something I want. The only “killer app” that I heard people had to have with a PC is one friend’s child who wanted “Fallout 4.” And she ended up getting a new X-Box bundle instead of the PC version.
The “easy to use” aspect is also a big deal. When Windows 8 came out, it was not even intuitive on how to shut the computer off. I literally gave a friend instructions on how to shut their machine down, then found (no lie) instructional videos on YouTube on how to shut a computer off.
Seriously Microsoft,…
This was beautiful Admin. Thank you for your reflections.
Thank you for great content. I look forward to the continuation.