MIDs get the squeeze from smartphones and netbooks - page 2

It also can be connected to the mobile carrier. This is a big deal in Europe where netbooks are leased out like cell phones and could be a trend this year in the U.S. AT&T executives for instance, without committing to anything, called out the netbook phenomenon during a wireless-heavy earnings call recently. The carrier is offering a deal with an Acer netbook for $99.99 with a two-year $60 a month AirCard agreement, according to recent advertisements.

"Without mentioning any specific names of carriers, There is a lot of interest worldwide to follow the cell phone model of subsidizing the hardware for a two-year package," said Kyle Thornton, category manager for ultra-light PSG Business Notebook Computing at HP. "Obviously with the embedded WAN these netbooks are the vehicles for their WAN programs. You're going to see more of these programs popping up everywhere."

Embedded WANs exemplify the changing netbook model. Original netbooks were really just small notebooks with less computing power. Their access to the Internet was via either embedded WiFi or a PC card or USB connection supplied by a carrier. While embedding the carrier's WAN into the device is becoming more common, the WiFi model is really driving the market--although WiFi and mobility might be cross-terms.

"We definitely do consider netbooks mobile; that's why they come with WiFi and have the small form factor," said Ninis Samuel, director of consumer marketing for Lenovo. "We've tried to make sure it has the basics covered in letting you connect wherever you want and it has a size and weight that's portable."

Netbooks, said ABI's Burden, are the right devices at the right time: bigger than a smartphone, smaller than a PC; smarter than a smartphone, dumber than a PC. And, most importantly in a tough economy, cheap.

"The price points are $300...the devices are almost disposable and by the end of this year we're going to be at a $200 price point. The future seems very bright for netbooks; I'm not so sure how much for MIDs," Burden said.

It's not, most of those interviewed emphasized, that MIDs are a bad idea; it's just that they might be following the 1990s mantra of "if you build it, they will come" and in this instance no one's willing to go out on a limb and build something without a ready market.

"The opportunity came for MIDs and MIDs took a long time to get going," Burden said. "We talked about it for a while; the opportunities seemed to be there but the usage model around it was kind of flimsy."

Most vendors won't give up on something that is technologically feasible and has shown market potential, even if its in overseas markets.

"We've actually had products in the past that were MIDs that were larger type phones," said Lenovo's Samuel, while emphasizing "we are essentially concentrating on the netbook space because we've been seeing where the market is going."

Same thing for Panasonic.

"I don't think we have a product in this space today [but] I would say that we, like everybody else in the industry, are interested in this space,"  Cove said.

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