It’s interesting to me to see vendors and pundits position the evolution of netbooks as "appropriate as a second portable or second computer." In my view they are ignoring history. Netbooks are not just "netbooks," they are the what I believe is a third phase of the decades-long evolution of portable computing.

Years ago, in front of an audience of hundreds, I asked a simple question: How many people like carrying around 5-7 pounds of notebook computer and power adapters? Needless to say, there were very few hands up in the audience. In my view, today’s netbook is the beginning of the evolution path of what a portable/notebook/laptop should be, after 27 years of evolution. Insert the usual caveat here: If you are a power user, or graphic designer, or love the exercise that lugging a 17" laptop around, ignore my comments, but for the rest of us, I think times are changing.

I’ve often said that portable computers as we know them today are nothing but a life support system for a power hungry display and an inefficient microprocessor. This has been a 27-year process, dating from the Osborne 1 of the early 1980s, a 20-pound luggable with a 5” monochrome CRT, through today. In my intro to the working world, I actually worked for a company whose primary product was an adapter that enabled the Osborne 1 hook up to a 12” amber- or green-screen monochrome monitor! We’ve come a long way, a way that can be roughly (for 1,000 word articles!) broken up into three phases.

Page 2: Ph-Ph-Ph-Phases!

Phase I: Pre-Flat Panel -- 1980s to mid-1990s. Portables began as repackaged desktops, with integrated CRT displays in the years before economic LCD panels. First, CRT ‘luggables’ like the Osborne or early Compaqs, then plasma displays, they were lugged by necessity, by road warriors, warriors who often ended up in chiropractic care after lugging 25-plus pound portables around the country -- speaking from painful experience with an early 28-pound Compaq. They had no connectivity as we know it today, with either external or internal wired modems at 2400 bps to 14,400 bps. No wireless, as 802.11 (WiFi) hadn’t even been ratified!

Phase II: flat-panel plasma/LCD — early 1990s to 2008. First plasma displays, then monochrome passive matrix LCD, grayscale passive matrix LCD, then the first Active Matrix monochrome and color panels... all expensive, all power hungry. For the last 15 years, Notebooks/Laptops have largely been 3-5 years behind their desktop counterparts in cost, power, and storage. Connectivity was wired until the advent of WiFi in the mid '90s and the take-up of Wi-Fi in early 2000s, accelerating in the past few years, with the first inklings of Wide Area Cellular-based mobile broadband only coming into play in the past five years. Still power hungry, still heavy, still expensive for connectivity.

Phase III: The third wave of mobile computing is just beginning, based on the device euphemistically called a "netbook" by folks scared of potential of cannibalization of their more costly platforms. Netbooks are devices that are not quite "there" yet, but will be "there" in the next 24 months, and will change our computing behaviors, backs, and pocketbooks forever.

These devices will weigh 1.5 to 3 pounds (0.75-1.25 kilos) and cost $250-$500, with a 7"-12" high-res display, tons of storage, usable keyboards, tons of radios on board (WiFi, 2G, 3G, GPS, Bluetooth, and maybe even WiMax if it actually gets anywhere), and battery life two or three times that of today’s notebook PCs.

After tracking netbook evolution for several years, I got my first one in December 2007, the AsusTek Computer Inc. EEE, which I ordered from Amazon the day it was introduced. It had a lousy muddy 7" display, a barely usable keyboard, unwieldy wireless, 512K RAM, 4GB of Flash memory, and rudimentary Linux for $399. Now it's the property of my six-year-old, who loves the Penguin Racing game and drawing program; I’ve moved on to the Acer Inc. Aspire One. Just 15 months later (and to be fair to Asus, they’ve upgraded massively as well), it has an 8.9" LED backlit LCD, a usable but small keyboard, great WiFi, a long battery life, 1GB RAM, a 160GB drive, and Microsoft Corp. (Nasdaq: MSFT) XP. All that for $379. Add in the free Open Office productivity suite (I'm not gonna pay $240 for a $379 device -- wake up, Microsoft, and give me a $10/mo SaaS option!), my licensed copy of Outlook through my Exchange provider, and for the first time in 26 years of using portables, I have a solution that’s two pounds and usable. For fun, I added Amazon Unbox for movies for my transcon plane rides!

Several vendors keep on crippling netbooks, slowing the development of Phase III, for fear of cannibalization of their notebook cash cows. They limit memory to 1GB and displays to 1280 x 600, which limits a lot of graphics and video. Some limit hard drive offerings to 60GB. Come on, that ODM 60GB drive probably costs the same as the 120GB or 250GB at this point!

The reality is that netbooks are not just for "surfing". They are the next phase of portable computing. They are here to stay. At some point vendors will drop the false "second computer" moniker, as the devices get faster, more connected, and more capable, while staying light and inexpensive. It has taken a while, almost 30 years, to get a portable computing device that does not cripple the back, break the bank, or be lousy with computing compromises, but we are getting there.

One last thought to keep in mind: The price points, capabilities, and economics of the so-called netbook will drive volumes waaaaay beyond what we’ve seen with notebooks/laptops, as the wireless operators will subsidize mobile broadband-enabled devices by the millions or tens of millions, and emerging/lower income markets will snap them up as the first connected computing device they’ve had access to at affordable price points. Competition and innovation will accelerate as Acer, MSI, and Asus challenge Dell Technologies (Nasdaq: DELL), HP Inc. (NYSE: HPQ), and Lenovo Group Ltd. (Hong Kong: 992), and my alma-mater Qualcomm Inc. (Nasdaq: QCOM)’s Snapdragon low-power chipsets begin to compete with Intel Corp. (Nasdaq: INTC)’s Atom offerings. Phase III has just begun.

— Jeff Belk is a principal at ICT168 Capital LLC, focused on developing and guiding global growth opportunities in the Information and Communication Technology space. He can be reached at [email protected]. Special to Unstrung

P.S. just so folks don’t think I am a Johnny-come-lately to the netbook party, spend a few minutes reading my Feb 2008 post from the Belkblog I did prior to writing for the Unstrung folks, I think you will find it interesting, or a video of a talk I gave at Stanford in December 2007, where I discuss the ASUS EEE.