Apple is known for creating revolutionary
devices that redefine their product categories and disrupt various markets. Take the iPhone for example, it forced us
to reimagine what a smartphone was and how it could be used. But it also made devices like music players
obsolete, which began the decline of the iPod. And in this video we’re going to explore
a very similar situation as it pertains to the netbook. This is Greg with Apple Explained and if you
want to help decide which video topics I cover, make sure you’re subscribed and these voting
polls will show up in your mobile activity feed. Now before we discuss how Apple destroyed
the netbook industry, we need to begin by defining what a netbook even is. And that includes understanding the state
of the tech market back when netbooks were first introduced. In 2007 Apple introduced the iPhone, which
was arguably the first modern smartphone consumers had ever seen, and it helped establish the
beginnings of the mobile tech revolution. You see, up until that point, mobile devices
weren’t very capable machines. Sure you could answer emails and do some rudimentary
internet browsing with something like the Blackberry, but there were serious limitations
that prevented it from delivering a desktop-class experience. iPods were also very popular, but they were
designed for very specific purposes. For example, listening to music or watching
tv shows and movies you bought from iTunes. And keep in mind modern tablets like the iPad
hadn’t been invented yet. So if you wanted a traditional desktop experience
on the go, your only option was to lug around a notebook computer. Which weren’t as thin and light in 2007
as they are today. Many computer manufactures identified this
gap in the market, and decided to bring back a product concept that had been attempted
in the past, but failed virtually every time. And that product was the netbook. Netbooks were basically miniaturized notebook
computers that included only the most essential features in an attempt to be as affordable,
compact, and light as possible. Now as I mentioned, this history of product
goes back before 2007, but had never seen much commercial success. And I’ll tell you why. In the 90’s netbooks were actually quite
expensive. One of the most popular, Toshiba’s Libretto,
debuted with a retail price of $2,000. Which wasn’t much cheaper than a standard
notebook that featured more power and a more capable operating system. That was another issue, most netbooks required
proprietary software applications in order to run properly on their less powerful processors. And for those that didn’t, its software
was typically stripped down and suffered from usability limitations. So with all of those disadvantages, the netbook
market never experienced much growth during that period. But all of this changed in 2007 thanks to
a few different factors. First, computer processing technology had
advanced enough to fit a sufficient amount of power into a small form factor. So for many users, netbooks were powerful
enough for their daily tasks. Second, the rise of web-based applications
and mobile networking made software more suitable for netbooks and eliminated the need for proprietary
application development. Third, the cost of netbooks were lower than
ever before at about $300-$400, heavily undercutting the average notebook computer price of about
$700. And when you combine the affordability factor
with the 2008 global recession that effected consumer spending, it’s easy to see why
netbooks became an appealing option for users who wanted a near desktop computer experience
on the go. In fact, netbooks proved to be so successful
that the market grew 30 times from 2007 to 2008, totaling about 12 million units sold. And by 2010, netbooks accounted for nearly
20% of the entire portable computer market, which was a pretty impressive showing from
a product category that had failed to gain traction in the past. But there was one serious compromise netbooks
had to make in order to achieve their compact form factor and affordable price. And that was, an enjoyable user experience. Netbooks had small low-resolution displays
with low brightness that made them virtually unusable outdoors or in bright environments. They had cramped keyboards that made typing
quite frustrating, their trackpads were tiny and required multiple swipes to move a cursor
across the screen, their battery life was typically too short to be reliable throughout
the day, and their slow processor and small hard drive made them virtually unusable for
any serious productivity work. And while consumers appeared to be okay with
all those compromises, it left too much room for the industry to be disrupted by a more
user-friendly product. And that’s exactly what happened in April
2010 with the release of Apple’s iPad. In fact, during it’s keynote introduction
in January, Steve Jobs mentioned the netbook [clip] And
what Jobs said was true. Netbooks hadn’t been better at doing any
task, they were simply a cheap version of traditional notebooks. And the iPad was the exact opposite. It included modern technology like its 9.7”
multi touch display and optimized operating system that featured an app store which made
the device even more capable and valuable. All at a starting price of just $500, which
put it in the netbook’s price range. So what the iPad did is it took the features
users loved about netbooks: like their compact size and affordability, and included them
in a device with none of the netbooks compromises. The iPad had a beautiful, bright, high-resolution
touch display that eliminated the need for a physical keyboard and trackpad, and it had
10-hour battery life. Which was at least double what you’d get
from any netbook at the time. It also had a thin, compact design that was
built for portability. And this isn’t even considering it’s high-quality
industrial design made from aluminum and glass as opposed to clunky plastic netbooks. It was clear Apple had a winning product that
was poised to single-handedly destroy the netbook industry. So it may come as a surprise to learn that
the iPad was one of the most criticized products Apple ever released. And I’m not just talking about the usual
hate from random people on the internet, I’m talking about reputable news outlets that
were quick to dismiss the iPad for reasons that seemed pretty obscure. PCWorld published an article that said this,
“at the end of the day, the show's centerpiece - the iPad -- is just a big iPod Touch. Lots of folks will want it, in a hypothetical
sort of way. But it's hard to imagine all that many of
them will fork over the initial $499 for a crippled version.” Here’s another article from Fortune, it
said “When I put it down on my sofa and caught it in less flattering light, I saw
my unattractive fingerprints all over it. When I took it to work the next day, it weighed
down the new handbag I’d bought in part because it would fit it.” And here’s a breakdown of the criticism
from Twitter users, 27% felt the iPad was just a big iPod touch or iPhone, 23% felt
it’s name sounded too silly, 15% made feminine hygiene jokes, 13% were upset it didn’t
support Flash, 12% were upset it didn’t include a camera, 5% wanted multitasking capabilities,
and the remaining 5% were concerned about AT&T network issues on the 3G models. Now looking back, these complaints may seem
pretty strange because we all know the iPad has become something much different than the
iPod touch or iPhone, and we’ve all gotten used to its name. But in 2010 criticism of the iPad from people
online was overwhelmingly negative. I remember a friend on Facebook making a post
that said something like “Why would someone need an iPad when a laptop already does everything? It’s just another pointless luxury product
Apple can sell to their fans who just want a status symbol.” Similar sentiments were echoed across so many
different forums and social media sites that Steve Jobs actually became annoyed and depressed
by the public’s reaction to the iPad. Especially since he was quoted as saying the
iPad was the most important product of his life. So for him, that level of backlash was likely
unexpected. And the criticism continued until the iPad
was actually released to the public about two months later. And I have to give David Pogue of the New
York Times credit, because what he predict turned out to be true. He said, "That [criticism] will last until
the iPad actually goes on sale in April. Then, if history is any guide, Phase 3 will
begin: positive reviews, people lining up to buy the thing, and the mysterious disappearance
of the basher-bloggers.” And that’s exactly what happened. The iPad went on to become one of Apple’s
fastest selling products and the company actually had trouble keeping up with demand for weeks
after its release. And what did all of this have to do with the
netbook? Well, it effectively destroyed the netbook
market overnight, with sales declining once the iPad was introduced. And just one year later in 2011 tablet sales
overtook netbooks for the first time. By 2012, Dell, Toshiba, Asus, Acer, and MSI
all stopped manufacturing their netbooks and instead began focusing on more powerful ultrabooks
to compete with the MacBook Air. So just like that the netbook industry come
to a screeching halt. And all because of Apple’s iPad. But that was about seven years ago, and today
many people are asking, “could netbooks ever have a place in the computer market again?” And I think as long as great tablets like
the iPad are around, the answer to that is no. But on the other hand, we are seeing products
like the Chromebook becoming more popular year after year. And Chromebooks appear to be serving the same
market as netbooks once did. They’re affordable and built to be used
with online web apps provided by Google. This means you don’t need a large hard drive
since all your data is in the cloud. They’ve proven to be very popular in the
education market with school all across the US adopting Chromebooks in the classroom,
and they’re actually eating into Microsoft’s domination of the computer market since Chromebooks
run Linux instead of Windows. But the biggest issue with the Chromebook
is that it’s still a notebook computer. And the computer market as a whole has been
in decline since 2012. That’s why Apple has been saying we’re
entering the post-PC era. Technology today is centered around mobile
device like smartphones, tablets, and smartwatches, and we’re likely to see that trend continue
for quite some time, until traditional computers are only used by specific people for a specific
purpose. Now as you can imagine I usually have to stay
up late at night to finish youtube videos, but I don’t enjoy the taste of energy drinks
or coffee, so instead I eat caffeinated chocolate. And my favorite brand Awake was kind enough
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see you next time.
