"Nettops" Reviving Desktop Market

(CNET)  This story was written by CNET's Erica Ogg.

---

Just a year ago, this category didn't exist. But after several Atom-powered all-in-one PCs debuted at CES in January, it's officially the hottest grouping of
desktops on the market.

A category long dominated by Apple's $1,200 iMac is suddenly rife with nice-looking imitators that pack less power than traditional Windows desktops, but are also gentler on the wallet. They're a subcategory of desktop PCs called Nettops, and, like
Netbooks, they're generally defined as a computing platform powered by the Atom processor that runs either Windows XP or a version of Linux. Combined with the all-in-one form factor and a smaller screen than most desktops (between 15 inches and 19 inches), they're essentially the Netbooks of the desktop category.

"A year ago I would have said Netbooks are not going to cannibalize the notebook market. Then the economy went kablooey," said John Jacobs, director of notebook market research for DisplaySearch. Since then, many people who needed a notebook have chosen to spend $400 on a Netbook instead of the typical $800 on a full-size notebook.

"I think we'll see something like that for Nettops," he said. "Either for retirees or younger folks who don't need the portability of a notebook, and just need something to get on the Internet and do basic computing. Nettops, and all-in-ones will be very attractive devices, and we expect to see a lot of retailers who have stayed out of it will jump into it."

The all-in-one category as a whole is expected to grow to more than 6 million units in 2009, and to over 7 million in 2010, according to DisplaySearch. That's almost an 80 percent spike in shipments, which was unexpected at the end of 2008.

Reinvigorating a tired category

In fact, the rise of all-in-one Nettops looks to be the most interesting thing to happen to desktop PCs in years. And, just as the economy helped bolster Netbooks' appeal, so too will it make Nettops more attractive to buyers, industry watchers believe.

"Right now, nothing is going to stem the losses in terms of shipment decline that the desktop PC category is experiencing, especially with the (current) economy," said Richard Shim, a PC analyst with IDC. "But Nettops and lower-cost all-in-ones will help to maintain some of the market share for desktops. It's a bright spot in the market."

All-in-ones grabbed the attention of PC makers more than a year ago when
Dell, Gateway, and HP suddenly debuted nice-looking desktops like the Dell XPS One and the Gateway One. HP's was even more impressive with its touch-screen interface--and accompanying high price tag.

Then Asus, riding the momentum of its Eee PC Netbook brand released the Eee Top, and MSI followed up its own Netbook success with the WindTop. And Dell dropped its pricier XPS One for the Studio One 19, which came with an Atom processor and lower price tag. All of these machines also have a touch screen or tablet-like stylus input.

According to DisplaySearch's calculations, all-in-one Nettops can feasibly be built for $399 at the cheapest. Add in retailer margin and the price goes up, but not by much. These generally cost between $450 and $800. For a desktop, that's an attractive deal if you just need a computer that's centrally located in the living room or office for the kids to do homework, or just to surf the Web and play movies and music at home. And for those who don't want
Windows Vista and need something before Windows 7, Nettops are the only desktops you can buy with Windows XP today.

Perfect for discount retailers

There's not a lot of hard data to gauge how well all-in-one Nettops are doing so far since they've barely been on the market in the U.S. (The biggest all-in-one market in the world is Japan, and several Nettops have been available there since late last year.)

When all-in-one Nettops do become more widely available here, they should get a boost from non-traditional electronics retailers, in the same way Netbooks have. Nettops are almost designed for discount retailers like Target, Wal-Mart, and Costco to love: all-in-one box, no need to stock many accessories, and the price is low. Right now Target sells the EeeTop from Asus, and Wal-Mart.com has an Averatec Nettop.

But there also should be some shelf space available for all-in-one Nettops from big electronics retailers like Best Buy that generally don't bend over backward to sell niche, low-margin products.

"Because of the economy, retailers were bearish on Netbooks, and they've changed their tune now that there is a nice healthy accessory market for them," said Jacobs. "Now there's that niche (they) need to fill, certain (price categories), and you'd rather sell something for $400 than not anything at all. The same will be true of Nettops."

By Erica Ogg

[puzzler125]

Since I've been told my laptop burns hotter and therefore lasts for a shorter period of time I would like to get a desktop computer for surfing, email, and most home computer work. Why "waste" my laptop when I need to take it to college and other places? There's not much need to use a laptop in the home unless you are wireless and even though do you really need to play online outside when we should all be getting off our widening butts and enjoying the outdoors and exercising!

[sjc_1]

You can buy a notebook for $400 or a netbook for $300. Unless you need smaller and more portable, the notebook is a better value.

[barbaram99]

I have a desktop that is powerful as I am on the net,e-mail,play games,make my greeting cards,watch TV, watch movies ,write my letters and what not on the computer.and have to have a big display. I use the nic card as dial up does not work for me as I need large print. I hate slow machines. We have a peer to peer network at home. i have to have DSL as I keep the voice phone for calls with a heart parent in the home.
I blog.

[optimystic]

There is another factor that makes the nettops and netbooks so attractive; that is easy access to high speed connections and theimprovement of Remote Desktop. Not very long ago, using a remote controlled computer for more than a few operations (starting some batch job or whatever) was not pleasant. Screen updates were slow and often incomplete and there were lots of compatibility problems. If you were ever going to work from home, you need as powerfula a machine at home as you had at work, which either meant lugging it back and forth or buying a machine for yourself that met your professional requirements instead of just your personal ones. Now I can use my wok machine remotely and have very little delay and nearly everything works fine. I know lots of others who have started working this way as well. I can put up with a machine at home that is rediculously underpowered for the work I am doing, because all I use it for is a graphical terminal when I am working from home. My personal needs are just web, email and photo uploads.

[barbaram99]

i think it is fine for the persons who can see to use it. It is not a computer for me as it is not legally blind friendly. It would be harder for the seniors with poor vision to use. I can see where it be a good student's computer.
XP Home is a good platform.
I use a desktop and notebook. Netbook is too small to use. It does not have the things I need.
Touch displays are useless to me. I am not ready to give up the mouse for fingers on the display.
So am reading about Windows 7. I do use XP Home and Vista Home Premuim.
XP Home is good for basics.