Asustek kicked off an entirely new category in the mobile computing space when it presented a prototype of its Eee PC at Taiwan's Computex trade show two years ago. Since then, many users have embraced netbook PCs for their small size, light weight and low cost. Their popularity pushed Microsoft to extend the life of Windows XP and they've turned out to be one of the bright spots in the PC industry over the last few months.
But the sector hasn't been a hotbed of innovation. Except for a few exceptions, most netbooks share pretty similar specs and are based on the same Intel Atom processor and Microsoft Windows XP operating system. But now, as the netbook sector enters its third year, new chips and operating systems hold the potential for massive change in the sector.
Leading the charge on the hardware side are Qualcomm and Nvidia.
Qualcomm has produced a new chip called the Snapdragon that uses less power than Intel's Atom, so it runs cooler and doesn't require a heatsink. That means laptops built with it can be thinner and have a longer battery life -- Qualcomm expects between 8 and 10 hours. The chip comes with a feature that will be appreciated by any traveller: compatibility with both major cell phone standards in use worldwide.
But there are potential drawbacks. Qualcomm's processors don't understand the x86 instruction set used by chips from Intel and AMD, so they won't run mainstream Windows. Instead, netbook makers are turning to Linux, which has been ported to many non-x86 processor architectures.
Prototypes of Snapdragon machines, and some based on similar ARM-based chips from companies like Freescale and Texas Instruments, were on show at last week's Computex, but no one was talking launch dates.
NVidia's proposition doesn't attempt to cut Intel out of the equation. It has developed a graphics chip called Ion to supplement the Atom processor and provide some nice performance gains.
"We believe that when a consumer shells out 300 dollars to buy a PC they don't say to themselves 'I didn't pay very much for a PC and I deserve a lousy experience,'" said Jen-Hsun Huang, CEO of Nvidia. "Between these two processors we would be able to enable a really delightful experience whether you're playing games, streaming video or wanting to create some home movies yourself."
In several demonstrations at Computex Nvidia showed Atom-based computers with the Ion chip could transcode video for a portable media player about 5 times faster than a computer based on Atom alone. The Ion can also add multimedia functions like Blu-ray Disc playback to the small, cheap Atom-based computers.
Intel isn't sitting still during this assault on the netbook market. The company continues to refine the Atom platform and the latest version of the platform, known by the code-name Pine Trail, has just been released. It consolidates the number of chips required from four to three and should lead to thinner netbooks with longer battery life and, possibly, lower prices.
On the operating system side the dominance of Windows XP remains strong although, due largely to the ARM-based chips, there's renewed talk about Linux.