AMD Thinks Netbooks Are Done; Intel Similarly Doubtful

Chief execs at AMD think netbooks are on the way out, and are taking steps accordingly.

They think the problem will be a lack of differentiation. CEO Dirk Meyer says “The distinction between what is a netbook and what is a notebook is going to go away… There will be a continuum of price points and form factors.”

In his eyes, the cheapness of netbooks results in a shoddy experience with the machines. “Given the way netbooks are configured today, consumers who want a notebook at those kind of (low) price points have to compromise and as a result don’t enjoy a full PC experience, particularly around the graphics and media capability of the machine,” Meyer said. “And likewise people who wanted a thin and light machine had to pay a lot of money, typically well over a thousand dollars.”

What Meyers doesn’t get is that people looking for a notebook at netbook price levels simply aren’t going to find them – they misunderstand the market, and dissatisfaction they have with netbooks often comes from misguided expectations. You can’t buy a luxury car at the price of a motorcycle, and if you do, you’re going to be unhappy.

However, if things go as Meyer predicts, he may have a point. He thinks the market is going to start delivering lightweight laptops at the price range of netbooks which will completely overpower them. This may sound like a stretch, but weirder things have happened before.

AMD has made some solid offerings to the netbook world in the past, including their Athlon Neo. They’ve also made some serious job cuts recently, prompting us to wonder if losses in the netbook sector have made AMD lukewarm.

Advanced Micro Devices has already made some steps to distance itself from netbooks, including marketing the Neo-using HP Pavillion DV2 as a notebook.

Interestingly enough, AMD’s move mimics some recent activity by Intel. Paul Otellini, Intel’s CEO, used some strange tenses to describe the machines. As emphasized by CNet, Intel says the netbook buzz at CES 2009 “validates our view that (the market) had a high potential for growth and it was an exciting segment, in particular in this kind of economic environment.”

That’s enough to make a lot of people nervous. What happens to netbooks if the Atom is left behind? Intel has already mentioned that its plans for the of the Atom are limited. While Otellini said that Intel “would do very well in the netbook market in the course of the next couple of years,” I still have some suspicions.

With major chip manufacturers AMD and Intel getting doubtful about netbooks, we can only wonder at the of the machines. If nothing else, dissapearing competition is going to make Qualcomm some serious cash with the Snapdragon.

Come back soon for more on the of netbooks.

Via CNet.

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