One of the things that the company I’m working for has considered is creating a Netbook version of our location-based software. So I bought a Netbook (The MSI Wind 120) in order to understand what all the fuss is about.

My observations:

(1) This is not a new product category.

To me, a new product category is a product which I interact with differently than with existing products. For example, I interact with my iPhone in a completely different way than I do with my 17″ laptop computer: I keep my iPhone in my pocket and pull it out to look thing up quickly, while my laptop gets pulled out of a briefcase and unfolded on a table.

A Netbook is a small laptop. It doesn’t fit in my pocket; I have to take it out and put it down on my lap or a table. I have to boot it up. It’s more convenient: I can use a smaller briefcase. It’ll more easily fit on the airline tray table in coach. But it’s a laptop computer.

(2) The best part about a Netbook computer is not that it is small, but that it is cheap. If you need a second computer or you cannot afford a good desktop computer, and you’re using it primarily for text editing or web browsing, a Netbook computer makes an excellent low-cost choice: I only paid $300 for mine.

(3) Other than this, the keys are cramped (making it a little harder to touch-type on), the screen is small (1024×600 pixels), making it inconvenient to use for text editing, and there is no built-in CD-ROM drive. (The Samsung SE-S084B external USB DVD-writer is around $60 and works great with the MSI Wind.) Thus, while it is an excellent low-cost choice, it’s clear it’s a low-cost choice: you are giving up a lot to save the $500-$1000 span between the 10″ laptop and a well-equipped 12″ laptop.

(4) A cheap laptop will never dethrone the iPhone in the mobile space. On the other hand the eagerness of mobile carriers to come up with something to dethrone the iPhone may force them to consider lowering the price of an all-you-can-eat data plan for laptops, which means a wireless cell card and/or built-in 3G wireless in laptops will undoubtedly be coming down the pike in the near future.

The real question, however, is will it be too little too late: a proliferation of free and cheap Wifi hotspots may make all-you-can-eat 3G wireless for laptops a terrible value proposition unless you need to surf the net out in the boondocks. (On the other hand, if you are in construction or farming, where you routinely work in the boondocks, 3G wireless for laptops will be a god-send.)

(5) A small form-factor touch-screen tablet will be a new product category if it satisfies the following requirements:

(a) Fast boot time. A touch-screen tablet needs to go from off to on in 2 seconds or less.

(b) It should be two to three times the size of the original iPhone. To get an idea of what I mean, here is a pictures showing the relative sizes of my iPhone, an HP 50g calculator, the original Kindle, the MSI Wind, and my 17″ Macbook Pro.

The iPhone is an ideal size to fit in a pocket, but once you get to the size of the HP calculator (one of the larger calculators out there), you need to put it in a backpack or a briefcase or purse. Around the size of the MSI Wind, and you need a dedicated carrying case for the device.

To me, an ideal “new product category” item would be somewhere between the size of the HP 50g calculator and the Kindle, with the Kindle being the top size for such a device.

(c) Battery capacity should be enough to allow the device to surf the ‘net and use the CPU full-boar for a minimum of 4 hours. The iPhone gets its monumental lifetime between charges from very clever power utilization: when surfing the ‘net, once a page is downloaded to your phone, the CPU is turned off. (It’s why Javascript animation execution stops after 5 seconds.) But if you write software that constantly runs and is not event-driven, especially software that uses the ‘net at the same time, the iPhone battery will drain in less than an hour.

I believe for such a small form factor touch screen device to do the trick it needs about 4 times the battery capacity of the iPhone.

Once you reach this size and have something that is “instant-on”, you now have a device that is big enough to work on where you are–and perhaps balance in one hand while you use it in another–but not so big that you need to find a table at Starbucks to pull it out. In fact, such a device would occupy the same product category space (in terms of size, form factor and how a user could interact with it) as a large calculator.

Which means one application which would be ideal for such a device would be a port of Mathematica or some other calculator software which would put the HP 50g to shame. Another application that would be ideal would be web surfing; ideally such a device would devote more disk caching than the iPhone does to web surfing. Also, vertical software for engineers, and e-book readers, would also work.

The idea here is to create a device that straddles the mid point between the iPhone “pull it out, look it up, put it away” 30 second use cycle, and the laptop “gotta find a table at Starbucks so I can pull it out of my briefcase” 1-5 hour use cycle.

And the MSI Wind (and other clamshell shaped cheap laptops) ain’t it.

Update: However, the CrunchPad very well may be the product I’m thinking about, assuming there is a way to install new software on the unit.