Surprise Hits: Netbooks are the future of computing

You take the internet and notebook computers, put them together, and you have what has become known as a netbook.

Netbooks have become popular in recent years as users get less attached to computer-based software and more amenable to using Web-based applications instead. Having a mini-computer in your hand became common with the advent of the iPhone. One drawback to Apple (AAPL)'s iPhone is that it has no keyboard. Netbooks' keyboards and bigger screens have made them a hot consumer-electronics product.

Netbooks can have screens as small as five inches or as large as 13 inches, and they are used primarily for sending e-mails or browsing the Web. The devices tend to weigh no more than three pounds and rely on slimmed-down Windows XP or Linux operating systems. Netbooks are cheaper than laptops, which usually come with more software and full-size keyboards.

Netbooks grew from a humanitarian project called One Laptop Per Child, a nonprofit group that aimed to supply remote third-world villages with bare-bones $100 laptops for children. The project inadvertantly encouraged competitors to market inexpensive notebook computers, including Psion's now-discontinued netBook brand, and the Palm (PALM) Foleo. In 2007, Asus began selling the popular ASUS Eee PC, and Dell (DELL) and Hewlett-Packard (HPQ) responded with netbook products.

Last year, netbooks began eating into sales of traditional laptops, which themselves have been cutting into desktop sales. For the future of computer sales, it appears size does matter -- and smaller is better. A market that once assumed its audience wanted more power in bigger packages has been surprised to find that its consumers really want their computers cheap, lightweight, and easy to carry around. The industry might not have seen netbooks coming, but now that they're here, they're not going anywhere soon.

Anthony Massucci is a senior writer for DailyFinance. You may follow him on Twitter at hianthony. He doesn't have a netbook, but does own a MacBook Air.

Be sure to check out all 20 recent products that became Surprise Hits.

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