A Computer for the Price of a Cell Phone

As the computing industry prepares for what is expected to be its sharpest decline in PC shipments in history, netbooks are providing a singular glimmer of hope. But though netbooks may cushion the overall downturn, they are also challenging the very definition of pesonal computers.

"They are kind of breaking the business model," said Robert Enderle, principal analyst at the Enderle Group.

The recession, combined with our increased mobility and the spread of applications that let us store and manipulate data in the Internet "cloud," will "fuel these low-cost computers and cause us to rethink computing in general," he said.

PC Industry Prepares for Worst Year Ever

Earlier this month, the technology research firm Gartner Inc. said in a report that the PC industry would suffer "unprecedented" market slowdowns. It forecasted that PC shipments would fall 11.9 percent from 2008 levels, with desktops hit particularly hard, estimating a 31.9 percent dropoff.

Despite the parade of dismal news, Gartner predicted that shipments of mini notebooks, or netbooks, would rise about 79 percent, from 11.7 million units in 2008 to 21 million in 2009.

But though the popularity of the netbooks is surging, George Shiffler, the research director at Gartner, cautions that the netbook is not about to crush its more powerful cousins.

"They really aren't a substitute for a higher-end notebook," Shiffler told ABC News.com. "What we have been seeing [consumers] do is buy these as second notebooks to accompany computers they already have."

Though they may help the overall industry, they still comprise only 8 percent of the overall market. And, he said, they've taken off, in part, because they're a novelty. "The netbook isn't the answer," he predicted.

However, Shiffler also said netbooks could put downward pressure on the prices of more powerful computers.

Netbooks Reach Tipping Point

Although smaller, lower-power laptops had been around, netbooks didn't really catch on until the fall of 2008. At that point, experts said an attractive price point, a weakening economy and effective marketing combined to push netbooks to the tipping point.

The cheapest netbooks, such as the Acer Aspire One Netbook and the Asus Eee PC Netbook, can start just below $250. But the more expensive ones, such as the Sony VAIO Lifestyle Netbook, can reach nearly $900, exceeding the cost of some regular laptops.

More money will get you a faster processor, increased memory, enhanced portability (lighter and thinner) and other features.

With more cramped keyboards and smaller (usually 8- to 10-inch wide) screens, netbooks provide a different experience than full-size laptops. But if you can get over the size issues, netbooks offer a wide range of services, from Web browsing and word processing to video chatting (many come with webcams) and photo editing.

Gamers and video editors would definitely need another computer to meet their needs. And though you can watch videos online (from YouTube and Hulu, for example) you would need to use an external DVD or USB drive to watch movies offline.

But the manufacturers would also like to see consumers buying their more expensive, fully functional computers, and they caution consumers against relying on netbooks alone.

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