Some PC makers don't know what to do with netbooks

— -- Netbooks, those pint-size laptops that unexpectedly sold like hot cakes last year, are making life stressful for Hewlett-Packard, Dell and Microsoft.

They're trying to determine whether netbooks represent a new category of low-cost computers ideally suited for these times — or a flash-in-the-pan. "These big players are uncertain about what the opportunity is here," says IDC analyst Richard Shim.

HP is experimenting with consumer models and promoting netbooks for limited business-use scenarios. Dell isn't saying much about what it has in mind. And Microsoft is hedging its bets, readying all versions of Windows to run on netbooks.

Asus, the upstart Taiwanese PC maker that launched the netbooks category in late 2007, is pushing to make them ubiquitous. It sells 20 models, including a touch-screen version.

The dilemma: Big tech suppliers remain heavily reliant on sales of high-powered, high-priced laptops to drive profits. Profit margins are razor thin on netbooks. And shipping millions of cheap PCs could drive down consumers' expectations of what they should spend for a basic computer, Shim says.

In 2008, computer makers shipped 9.9 million netbooks, making it one of the hottest consumer electronic products of the year. According to IDC, 6.7 million units went to nations in Europe, the Middle East and Africa; 1.4 million to Asia and the Pacific; and 950,000 to the USA.

Even so, Stephen Baker, analyst at NPD Group, says netbooks hold limited appeal for home users — and none for business users. "These things are just not designed for people to use for long periods of time," Baker says.

Still, low price could help them catch on as a second PC in many U.S. households, especially those with Wi-Fi home networks, Forrester analyst J.P Gownder says.

Dell, for now, suggests business users stick with full-size laptops, spokesman Jeremy Bolen says. HP last fall introduced a Vivienne Tam designer model, pitching netbooks as a fashion statement.

Meanwhile, at the Consumer Electronics Show this month, HP rolled out "road warrior" models aimed at business travelers.