Netbooks are dead. Long live the notebook.

Netbooks were hot in 2008 and the first half of 2009, but the trend was actually more of a fad. Learn why it’s over, and why that’s a good thing.

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Netbooks — those underpowered mini laptops with 7-inch screens and unusable little keyboards — are a dying fad. However, the legacy of the netbook will be that inexpensive notebook computers are here to stay, and they are lighter and thinner than ever.

Analysts and pundits will continue to use the term “netbook” but I’m going to argue that the device that we originally called the netbook is being phased out — and thankfully so.

It’s important to remember that the netbook had its origins in the OLPC and the original ASUS Eee PC. Those little computers were designed for school children in the developing world (hence the little keyboards, which weren’t so bad for tiny fingers). These machines cut corners on hardware in order to create super-cheap PCs in the $100-$300 range that could be widely deployed overseas in places that had extremely limited budgets.

But, then a funny thing happened. People in North America and Europe and Japan started ordering these netbooks. The OLPC, and especially the Eee PC, became surprisingly popular among North Americna consumers. Once that happened, the race was on for every PC maker to get a piece of the action by making their own netbook, and all of them did, including Hewlett-Packard, Dell, Acer, and Lenovo.

Some tech enthusiasts bought these netbooks out of curiosity, since they were so cheap there was nothing to lose. Some people bought them as second or third PCs that were good enough for quick Web browsing from a little PC that they could leave at the bedside or in the den. Those kinds of purchases were understandable and fairly harmless.

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The problem came when regular consumers looked at netbooks and confused them with real laptops. To these consumers, the term “netbook” meant two things: cheap and portable. What many of them quickly found out was that these PCs had LCDs so small that they didn’t work well with many applications and Web sites, had non-standard keyboards that were not meant for extended use with adult-sized fingers, and had CPU power that was ill-equipped to handle heavy multi-tasking or anything other than standard Web or productivity applications.

As a result, market analyst Biz360 released a report earlier this year that showed consumers had a significantly lower opinion of netbooks than standard notebooks. According to Biz360’s “Net advocacy” rating (based on more than 20,000 online consumer opinions), netbooks scored 40 percentage points lower than regular notebook PCs. A separate study by the NPD Group reported that consumers had a lot of confusion about buying netbooks.

Now, this doesn’t mean that there aren’t some netbook fans out there. There certainly are. Many of them will argue that most computer users don’t need most of the power in today’s PCs and that netbooks are “good enough.” That’s a reasonable argument for people who know what they’re getting themselves into, such as those buying a second or third PC for limited use.

However, for those buying netbooks to be their new primary PC or for road warriors buying one of these machines for portability and productivity during business travel, they will often be very disappointed. Why? Because, in many cases, these machines will be slower and less functional than their old PCs or laptops, especially if those machines are two years old or less. When someone buys a new PC, the person expects it to be faster than their old PC, or at least as fast but a lot more portable. Taking a step backward in performance and functionality is always going to be a disappointment for a PC buyer.

The netbook performance compromise is slowly evaporating though, as netbooks become less and less distinct from regular laptops. Once PC makers caught on to the idea that buyers didn’t like the small screens and condensed keyboards, they started making netbooks larger. The keyboards have gotten more roomy and the LCDs have grown from the standard being about 7-inches to more like 10-inches.

Plus, Intel has also thrown a new curveball into the game with its CULV chips that are enabling PC makers to build ultraportable laptops that have full size keyboards and screens, like standard notebooks, while being super thin and as light as a netbook. Meanwhile, these systems are only a little more expensive than the average netbook, and they offer much better battery life (up to 6-8 hours, in some cases).

Mark Spoonauer, the editor in chief of LAPTOP Magazine, recently wrote about the fact these CULV notebooks are taking away all of the incentives to buy netbooks in his article Are Netbooks Officially Obsolete?

Even Microsoft CEO Steve Ballmer and Dell CEO Michael Dell have spoken out about the poor user experience of netbooks. Ballmer is especially bullish on CULV systems. Of course, it’s important to realize that both Dell and Microsoft make more money from notebooks than netbooks, but we should also keep in mind that they don’t like unhappy customers either and the netbook customer satisfaction numbers are a little disturbing.

While netbook sales are expected to reach 25-30 million units in 2009, much of what is being counted as a netbook is looking much more like a standard notebook. Thus, I’d propose that it’s time to kill the term “netbook” altogether. It only serves to confuse buyers and it was a phenomenon that has clearly run its course.

Want to read the counterpoint to my argument? Check out Larry Dignan’s response on ZDNet.

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See more: Here are TechRepublic’s reviews of various netbooks from a business perspective:

• HP Mini 2140
• ASUS Eee PC
• Acer Aspire One
• Lenovo S10
• Dell Mini 10
• ASUS N10
• MSI X340 Slim (CULV notebook)