PC Makers See Big Trouble in Smaller 'Netbooks'

Smaller and lighter than most textbooks, “netbooks”—the latest generation of computers used for light computing and surfing the web—are causing heartburn among PC manufacturers who see the low-cost innovation as a threat to already-slim profit margins, the New York Times reports. Perhaps more worrisome to giants like Microsoft and Dell is that the trend could signal a major industry shift.

The upstarts are challenging the notion that consumers prefer their machines come with built-in computing power rather than use what’s available online via so-called cloud computing. One Silicon Valley startup is launching a $300 “net-top,” offering basic functions while using a fraction of the electricity, and at a fraction of the size, of traditional desktops. (More Hewlett Packard stories.)