If you have been around for a while you might remember the days of the free and $400 e-machine systems. These were extremely low performance systems that were often bundled with MSN, AOL, or other internet provider contracts. It enabled e-Machines and the many dial-up ISPs [Internet Service Providers] to make a killing.

But what it did in the end was flood the market with computers that could barely live up to user demands and often failed within months of purchase. I cannot tell you how many times I had friends ask me to look at their brand new e-Machine to see why it would not play this game or that program. The e-machines back then shipped with a shoddy 120-180 Watt Power supply that would often die in or around six months. There was no real upgrade path for the old e-machines as they were designed to be disposable systems; once they died you went out and bought another.

Today, we are seeing the reoccurence of a familiar pattern. This time the economy is driving people to cut corners and pushing new system sales straight into the under powered netbook and nettop systems. Now I am not saying that Netbooks are bad or that they will die quickly; what I am saying is that again we see people gabbing up systems that in most cases will not do everything that they want or need.

In an article I wrote yesterday I talked about the death of the netbook. That is the death of the small portable limited use system. The netbook as designed was intended to fill a gap in the current system food chain. It was never meant to be a full scale system. Yes, there is a place for it in the market, in fact, in many markets – such as many homes where the need is small such as e-mail and office productivity only. But where things begin to fall apart is when people rush out to buy that new $400 “laptop” only to get it home and find it has a very small hard drive, limited RAM, no CD-ROM and can’t run everything they want to throw at it.

I saw this happen first hand over the weekend at a big package store that I will not name. A person was yelling at the returns counter about the piece of garbage [she used a different word] laptop she had just bought the night before.

This was a “manager’s special” and came with a bundled printer. Well the deal went very sour after she got the book home and found that it had no CD/DVD-ROM to install the printer drivers, or the other software she had been talked into getting. It was pretty obvious that she did not know what she was buying and was only going on what she was told by the sales rep and the final price tag.

Next Page: Conclusion

This situation is repeated several times per day at large stores and online at e-tailers.  I spoke with the returns clerk after the incident and he told me it was a very common happening now due to the great prices being offered on the netbooks and the limited knowledge of the average consumer. He also noted that they only had open demos of the very high-end variety which gave most people a false impression of the way that all netbooks performed.

After hearing this I took a quick tour around the store and found that there was indeed only one netbook on display. It was a $700 HP offering while the common netbooks were stacked up with large signs showing the great deals on them without a single model for potential buyers to see woking.

So we see the economy driving people to netbooks without them fully understanding what a netbook is. The cost of the low powered systems is a very attractive thing especially when you are counting every dollar. Yet, the average user really needs more than just your typical netbook or nettop can provide. Does this mean we really do need the ION platform or faster Via and Intel CPUs for the netbook? I say no, as for the most part these new parts will drive up the cost of the netbooks while not truly giving most consumers what they are really looking for.

We need to see more consumer awareness on what netbooks can and cannot do. We also need to see some better ethics in the sales practices of the OEMs and package stores when it comes to selling these products.

Editor’s Note

What happened recently isn’t just limited to Sean’s experiences. We are now seeing that netbooks are getting DVD-ROM drives, larger screens and many other features that belong to a proper notebook segment. Last night, I had a conversation with one of the editors, who openly attacked Sean’s original piece. However, the fact of the matter is very simple – you cannot sell a netbook for $800 and claim that it is a netbook. It is a seriously underpowered notebook that is not able to drive the resolution of the display, yet alone perform normally in tasks needed by the average consumer.

At the same time, Intel is in danger of building all those Fabs for nothing, since average ASP of the netbook cannot be as high or sell as fast as the foundries depriciate. We plan to bring a series of articles that will consider system building and all the aspects that need to be accounted for, and we hope that industry can draw a conclusion out of them. For that series, we are working with experienced system builders. Stay tuned.