$300 Computer Sets New Standard

March 13, 2009— -- The last time Georgia Santos went computer shopping, she steered clear of the hulking desktops and barely glanced at the dizzying array of laptops.

Instead, the 23-year-old New York student made a beeline for the newest and cheapest species to emerge from the computing industry: the netbook.

She said she has an aging laptop at home, but instead of swapping it for a similar model, she wants to replace it with a sub-$300 Hewlett-Packard Mini netbook.

She knows this new class of computers can't compete with fully-functional laptops and desktops when it comes to memory, power and battery life. And, truth be told, she is a little worried that she won't be able to easily watch or burn DVDs on a netbook.

But she told ABCNews.com, "I work most of the time on the Internet and not with large files. ... I think it would work."

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 challengingthe 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.

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.