The Register quoted Dell as saying that a purchase could lead to a fast case of buyer's remorse. "If you take a user who's used to a 14- or 15-inch notebook and you say, 'Here's a 10-inch netbook,' they're gonna say, 'Hey, this is so fantastic. It's so cute. It's so light. I love it,'" Dell said. "But about 36 hours later they're saying, 'The screen's gonna have to go. Give me my 15-inch screen back.'"

The Threat From Netbooks

Observers had differing views on what was behind Dell's comments.

John Jacobs, director of notebook market research for DisplaySearch, painted a picture of a company facing difficult choices in how it approaches the category.

A study he wrote that was released last week suggested the danger netbooks represent. The research showed that the devices are increasing their market share in the overall notebook category. However, because they are cheaper than ful-fledged notebooks, they are depressing the category's revenue.

With this as background, Jacobs said that pushing netbooks could create problems with three significant constituencies: Customers, Intel and Microsoft.

He said research by DisplaySearch's parent, the NPD Group, indicate that a significant portion of people who claim to understand the limitations of today's netbooks still report disappointment with their performance. That unhappiness, Jacobs said, will grow if the most obvious approach -- bolting bigger displays onto the same hardware and software packages -- is taken.

"Even if you take the netbooks of today and give it a better display, that's only a piece of the puzzle," Jacobs said.

Keeping Profits Clear

Intel and Microsoft also must be treated with kid gloves. The companies don't want netbooks with 14- and 15-inch screens to emerge as users' primary computers. The problem is a form of mission creep.

"What we've learned is that Microsoft and Intel ... have specific pricing in specific market segments and want to keep those segments as clearly defined as possible," he said. "They don't want stripped-down (Windows) XP and (Intel) Atom to bleed into larger and more profitable segments."

At the end of the day, Jacobs said, Dell seemed to be saying that netbooks are fine secondary computers -- and no more. "[W]hat he is trying to say are that these are not replacements for notebooks. They are ancillary devices."

Dell may want the category to evolve, said Andrew Borg, Aberdeen Group's senior research analyst. Dell's comments, he said, are to be expected.

"The party line is that netbooks are underpowered toys and lead to end-user dissatisfaction. That's just like when (Apple CEO) Steve Jobs said that the iPod is not the proper format for viewing video or films while they were in the act of working on making the iPod the killer media device."

Borg suggested that Dell may be looking at netbooks that go beyond the stripped-down Windows XP and Atom processors of today. "It sounds like Dell was purposely referring to the current generation of netbooks," he said. "Perhaps he may have a different response if he was questioned about the future of the platform."