You may have caught my title and asked “aren’t Netbooks dead? Why are you bringing them up?” That is an excellent question and while Netbooks are mostly dead (they are finding a role in emerging markets) they taught us something very interesting that sheds light on the tablet phenomenon.
Since our firm tracks the computing industry extremely closely, we were doing quite a bit of analysis on the market for Netbooks. Although it was short lived, which we predicted, they taught us something that is fundamentally important to understand. Which is that there is a massive market for computing devices that are good enough.
An Important Evolution
When the Netbook began its rise as a category we started looking at what were the driving factors for their market success. From our consumer interviews we learned a number of interesting things.
First was that most buying a Netbook were not looking to replace a notebook, rather they were looking for a less expensive 2nd, 3rd, 4th, computer for their home and/or family member to be able to get online, do simple tasks, etc. What became clear was that not every member of the household had a personal computer in an average home and many consumers appreciated the low-cost and small size of many Netbooks to fill this void. These products represented a low-cost way to get multiple new PCs in the home for simple tasks and more importantly alternate screens for web browsing. Large numbers of consumers told us that the few PCs they had in the home were constantly being fought over, mainly for web browsing. Netbooks looked like an easy way to get everyone in the home a PC screen of some type. Many knocked the category at the time and believed Netbooks were just truncated PCs, however, they were good enough for the mass market.
But our interest in Netbooks went further into the experience consumers had with them. More often than not consumers mentioned how the capabilities of the Netbook were sufficient for most, and in many cases all, of their every day needs for a personal computer. This led to the good enough computing reality that has opened the eyes of many in the industry. As innovations become saturated and mature, at some point distinct elements of those innovations reach a point of good enough or diminishing returns. At this point, further innovations in the same areas become less apparent and obvious. This is particularly true of things like semiconductors, displays, broadband, etc. In all these instances there comes a point in time where the advancements become harder to distinguish.
An analogy I’ve used frequently when discussing good enough computing is one related to Intel. Back when Intel was pushing Moore’s law heavily and MHZ and then GHZ was a big deal, we could objectively see the speed and performance advancements by simply opening a program like Word or Excel. I recall at many IDF conferences, Intel opening an MS Office program and showing how much faster it opened on the latest generation over the previous. Today, no such example exists for the casual observer to notice the performance benefits of new generation silicon. CPUs have reached a point of good enough for the mass market. And Netbooks brought this realization to light.
Good Enough and Smart Enough
It was this realization and learnings around Netbooks that led us to believe that tablets would be as disruptive as they have been. Tablets, like Netbooks, have taken advantage of the good enough computing paradigm but done so by adding something Netbooks did not–touch. I’ve written extensively on the concept of touch computing and why I believe it is foundational to the future of computing so I won’t go into too much detail here. Touch and the tablet form factor made the good enough experience for consumers even that much more compelling, forcing them to evaluate if they need anything else as far as computers go. Some consumers may need more than a tablet, and some may not, the point is they will decide what works best for them.
The full realization in all of this, is simply that there is a massive section of the market that does not have extreme demands with technology. When we were doing market analysis around Netbooks, we asked consumers the tasks they did with PCs on a regular basis. From that research we learned that the vast majority of those we spoke with, who fell into the early and late majority, used less than five applications daily and none of them were CPU intensive (arguably playing Flash video is CPU intensive but that is a debate for another time).
The key takeaway to understand with good enough computing is that many of the key features and innovations that originally drove demand diminish (i.e CPU speed, memory, resolution, # of apps, etc.) This means that future product generations need to appeal to customers in new ways that go beyond the elements which are good enough. I believe that too often companies get stuck putting too much emphasis on the elements of their products which are already good enough for the mass market, thus those features get glossed over, when in reality they should shift their emphasis to what is new or unique. Quality product marketing, messaging, and positioning will be at a premium going forward.
What appealed to the mass market of computing the past few decades will not be what appealed to them now in a mature and post-mature personal computing landscape. Understanding good enough computing does not mean that you stop innovating. What it does mean, however, is that it will be absolutely critical to be careful not to pre-maturely bring key innovations to market and risk having the mass market not understand the value of them. The key, rather, is to carefully and strategically bring key innovations to market at precisely the right time in which the mass market will value them.
