by Steve Wildstrom

Netbooks were a surprise hit in 2009 and the march of these diminutive, low-cost notebooks is continuing at the International Consumer Electronic Show, which opens Jan. 7 in Las Vegas. A big story this year is improving graphics performance, netbooks’ most serious weak spot. A second story, which I will cover in another post, is the competition to netbooks that will come from even thinner and lighter “smartbooks,” which use neither Intel processors nor Windows.

Hp_mini_311 Once upon a time, say a couple of years ago, providing a high-quality video experience was very low on the list of must-haves for designers of highly mobile devices. That is painfully evidence if you have tried to watch Hulu on most netbooks or view a Flash video on a smartphone. Both netbooks and smartphones were seen as devices primarily for Web browsing and email reading and designers will willing to sacrifice performance, particularly graphics performance, to achieve long battery life or reduce costs. If it was good enough to play a grainy YouTube clip, it would do.

This has changed dramatically with the explosion of high-quality online video and the desire of consumers to watch it on whatever device was at hand. A flock of new chips hitting the market is going to produce much better video on a variety of devices.

Netbooks, the diminutive laptops that became a surprise hit in 2009, are generally powered by Intel’s Atom processor paired with Intel’s integrated Graphics Media Accelerator 950, a combo that provided marginal processing power from both the CPU and the graphics. Some higher-end netbooks addressed the problem by replacing the Intel graphics with NVIDIA’s Ion, a pairing that gave much better video performance at some price in battery life.

Atom-ion Intel has tried to address performance problems with a new generation of Atom chips code-named “Pine Trail.” (Pine Trail is actually the new Atom chipset platform; the CPU alone is confusingly codenamed Pineview. Early reports on Pine Trail are a bit disappointing; the processor offers improved battery life, but not much in the way of higher performance. One solution may be a expected successor to the Ion. Exactly how the Ion 2 (which may or may not be the real name; writing for an NVIDIA blog does not give me any access to inside information) will work is a bit mysterious since the Pineview CPU includes an integrated graphics adapter. More detail on Ion 2 should be forthcoming soon perhaps at CES.

The alternative method to better netbook video is the Broadcom Crystal HD decoder chip. It’s a more limited solution than Ion, but it does provide a better HD video experience than a straight Atom setup and is less of a battery drain than Ion. One word of caution: Claims of 1080p HD video for any netbook are meaningful only if you are connecting the computer to a 1080-capable display through an HDMI cable. Netbooks screens are simply too small to display 1,080 lines of video.

Netbooks are also getting some signficant software help. Windows 7 combines a much more operating system than XP, especially when it comes to wireless networking, without a sacrifice in performance. And Adobe’s forthcoming Flash Player 10.1 should be substantially easier on resources than the current piggy Flash 10.

Former BusinessWeek columnist Steve Wildstrom is serving as a guest blogger at CES for NVIDIA, for which he is receiving compensation. The opinions expressed in his posts are his own, and not necessarily shared by NVIDIA.