Netbooks — those small, underpowered, Internet-centric computers ranging from $300 to $400 — have been a rip-roaring success since they hit the market a year and a half ago. This year alone, 35 million netbooks are projected to be sold, and it is reported that one out of every five PCs sold has been a netbook. Almost all of the global computer manufacturers, including HP, Dell, ASUS and Acer, have netbooks in their product lines.

But if you ask companies like Qualcomm, Freescale and Nvidia, they’d say there is room for another type of uber-portable, connected, cheap and underpowered computer — the so-called “smartbook.” A portmanteau of the words smartphone and notebook, smartbooks are a mixed breed of the two. The device promises to deliver features found in smartphones (long battery life and connectivity with Wi-Fi and 3G connectivity), but in a laptop-like clamshell design (with a larger screen, full keyboard and mouse pad).

Smartbooks will be lighter, cheaper and more connected than netbooks, but core ingredients of today’s netbooks — including Intel processors and Microsoft’s operating system — are missing, and that can present usability challenges to mainstream users. While some will aim these devices at a specific market, they are really meant broadly for those on-the-go that require Internet connectivity (whether that be social networking, email, etc.) in a more ergonomic package than a smartphone, but want a longer lasting and more portable device than a netbook. With a slew of obvious and not so obvious differences from the netbooks, the question remains: Will the new crop of devices, set to hit the market in early 2010, appeal to buyers?

Different Genetic Makeup

The first smartbooks may be thinner and lighter than today’s netbooks, but they will look like laptops with clamshell form factors, 9- or 10-inch displays, keyboards and touchpads. But one of the major differences between the soon-to-arrive smartbooks and the netbooks currently being sold by companies like ASUS and HP are not visible from the outside. Typically, netbooks use an Intel Atom processor or x86 processors that can run a full Windows operating system. Smartbooks, on the other hand, will use processors based on an ARM architecture with chips that are typically found in the most powerful smartphones, such as the Palm Pre and Motorola Droid.

ARM chips, while not packing as much computing power as Intel’s Atom processor, offer better power efficiency (up to 10 hours with a three-cell battery, rather than a netbook’s 2.5 hours with the same capacity battery), are smaller, require no fans, and also allow for major modifications. ARM licenses its technology to its partners, and they, in turn, can add to the architecture, tailoring the device for different features, such as video or connectivity. ARM’s partners have plans to participate in the smartbook ecosystem and add specific capabilities to their chips to differentiate them in the market as follows:

• Qualcomm Snapdragon – With Qualcomm’s strong presence in cellular chips, its solution will focus on connectivity and power consumption. The original chipsets coming from the Snapdragon family will breed 3G connectivity with the core ARM processor.
• Nvidia Tegra – Nvidia’s bread and butter is in multimedia and graphics, and Tegra is focused on the visual computing experience. The company has coupled the ARM chip with video-acceleration features, making it capable of HD 1080p video, advanced 3-D graphics and imaging capabilities.
• Freescale i.MX515 – Freescale’s i.MX515 will focus more on low power consumption along with video and graphics.

Windows Closed, Clouds Open

Smartbooks won’t only lack Intel processors, they’ll also lack Microsoft’s Windows operating system. With ARM chips unable to support Windows XP or Windows 7, manufacturers and chip makers will be looking to Linux operating systems to provide instant-on user interfaces for the underpowered smartbooks. While Freescale plans to deploy smartbooks running Ubuntu at first, and Nvidia has built its own interface on top of Windows CE, the key player in the game could be Google with its Chrome operating system, due out in late 2010. The browser-based OS, which will feature a number of web-optimized applications, is ideal for this new crop of devices — and it will be capable of running on the ARM architecture. Until then manufacturers like Lenovo will be creating their own user interfaces over Linux to make it easy for consumers to access popular web services such as Twitter, Facebook and YouTube.

However, like the first netbooks that ran Linux, the lack of Windows will always pose a problem for some consumers. Recall that the first ASUS Eee PC, which was largely regarded as the first netbook, ran Xandros Linux. Consumer demand proved that Windows XP was the operating system of choice, and today you cannot buy an Eee PC with a Linux OS preloaded. In the case of smartbooks, the mainstream consumer must be educated not to expect to be able to run Windows applications, but to open a notebook and power up a slimmed down operating system that is heavily reliant on the cloud.

Cellular Connectivity Included

But with smartbooks the operating system is of less importance since their focus, like smartphones, is on connectivity. The theory is that the underpowered notebooks don’t need the processing power or full operating system experience of Windows because with instant-on connectivity users will live in the cloud, using the web browser to check email, access social networks and search the Web.

Like a number of netbooks that are currently sold with cellular connectivity, smartbooks will be sold along with contracts for 3G or 4G (WiMAX and LTE) connectivity. Some of the earliest example will even be sold strictly through the cellular carriers. For example, Mobinnova  — makers of the Freescale-powered Beam smartbook along with Lenovo, which is making its own Qualcomm Snapdragon powered device — has already teamed up with AT&T and plans to sell the device through its stores in early 2010 with a subsidized price.

Sacrificing Power for Price?

All the defining characteristics of smartbooks mentioned above will surely make the category one of interest for computer manufacturers, cellular carriers and high-end consumers. However, its widespread appeal is uncertain and will, in a large part, depend heavily on pricing.

Estimated to be priced in the $200 range (most likely less with a cellular contract), smartbooks will cost roughly $100-200 less than a netbook and are closer in price to the more powerful smartphones on the market (the Motorola Droid and Apple iPhone are both $199 with two-year contracts). The pricing model is suggested to be similar to the smartphone market, with some smartbooks potentially being free and subsided by the carrier in exchange for a two-year contract (likely an average of $40 a month for connectivity).

Outlook

The first generation of smartbooks will attempt to fill the debatable void between smartphones and computers. Promising longer battery life, more connectivity and lower prices than netbooks and a more comfortable experience than tiny smartphones, the category seems like a logical one for those that want to be connected.

But just which connected individuals? Like netbooks, smartbook manufacters will look to target the new product category at mainstream consumers who are looking for a cheap notebook to get online quickly, whether it is to visit Facebook or update Twitter. However, it will only be with the right support and marketing to these types that they will succeed. If not, it’s likely going to only be very niche type of users — those who embrace Linux, cloud services and storage — that will adopt smartbooks.

But regardless of the audience that these are marketed toward, the new devices’ reliance on Linux, an unfamiliar operating system to many, and a cellular contract are considerable barriers for widespread adoption. In addition, given the market’s saturation with smartphones and the fact that netbooks will continue to come down in price and continue to get a battery life boost, the smartbook’s position likely isn’t one aiming at a real consumer need.

The second generation of smartbooks — said to be crafted differently than the typical netbook and promising touchscreens and tablet-style form factors — could be more impactful. This, along with time for Google’s Chrome OS to be primed and cellular carriers to build up their 4G connectivity with cheaper contracts, may make smartbooks, a year or so from now, a whole lot smarter than they may seem today.