Netbooks have recently become the fastest-growing category in the PC market, with 35 million units predicted to ship this year.  But should netbooks be cheap small laptops or can they, like the iPhone, make you go wow? 

A number of industry reports contend that netbook sales are eating into traditional notebook sales.  While it’s not entirely clear how many netbooks serve as notebook replacements versus supplements, it’s obvious that the big industry players are concerned about the increasing commoditization of the market as netbooks grow in popularity. Microsoft and others have referred to the problem publicly in recent times.

This situation presents PC manufacturers with a confounding dilemma.  Do they fight the battle of low-margin machines by simply trying to produce the best netbook in the market or do they limit the capabilities of their netbooks to protect their sales of full-fledged notebooks?

We think there’s a third alternative which is much more enticing for the consumer and the manufacturer –  make a netbook that is a pleasure to use and can serve as a gateway to lucrative subscription services. The model would be much like that of the smart phone - subsidize the hardware and make money on the services.

Amazon is doing this with the kindle, selling a device which has large amounts of residual revenue by simply making it easier for people to buy and read books.  Apple did this twice – first with the iPod by making it easy for people to consume music and then with the iPhone and its 15,000 apps.  The key is that the buying experience has to be seamless and the additional items affordable.  Think of buying songs for in iTunes or apps in the Apple App Store for $.99. 

This could certainly be done with a netbook.  Imagine a sexy, highly usable netbook that you could get for $99 and then begin easily adding apps, services and content.  Would you be willing to pay a few bucks for 3G service so you were always connected?  What other services would make sense with a stellar netbook?  We can think of many, including ZumoDrive.

With Zumodrive, we help people store, access and share the bits of their life – their music, their memories and their ideas. People don’t want to think of where all this is stored and how to take it all with them on their various devices. They just want to know that it is all constantly protected, always accessible and easily shareable.  We have leveraged the cloud to make this more of a reality, and we would love to see cool netbooks where ZumoDrive could be added for a few more bucks with a click or two.  Would you be willing to pay a few more bucks to always have access to all your personal content?

We’d be thrilled if the PC industry focused on making netbooks better and delivering a great mobile experience on them, and we’ll do whatever we can to make that experience even better.