The VAR Guy thinks Linux Netbooks may have fallen into a pool filled with chilly water. The apparent result: Continued market shrinkage. Alas, The VAR Guy doesn't have official market data to share. But three pieces of circumstantial evidence suggest the Linux Netbook market continues to decline in North America while the Apple iPad and tablets continue to rise. Here's why.

In recent weeks, The VAR Guy has visited Dell.com, System76.com and ZaReason.com. During the height of the netbook craze, each of those PC makers prominently promoted Linux and Ubuntu netbooks. Check the sites now and all three companies seemed to have backed away from Linux netbooks. And Dell's old Ubuntu site (www.dell.com/Ubuntu) seems dead -- though if you look closely enough you will find some Ubuntu systems on Dell's site. Plus, Dell is working closely with Canonical -- the company behind Ubuntu -- in the cloud computing market.

Still, where have all the Linux netbooks gone? Back in 2008, they were available from major retailers across North America before the netbook market began to shift to Windows. Now those Linux netbooks are nowhere to be found in North America retail stores, and somewhat difficult to find online. Here's some perspective from System76 President Carl Richell.

The VAR Guy: Have you ever offered netbooks?

Richell: We offered netbooks for a while; however, the product was discontinued last year. We conduct regular baseline performance and quality standards reviews. Smooth HD video playback became a baseline performance requirement for System76 products. The Atom architecture did not meet the requirement.

The VAR Guy: Is the netbook market still viable or did it die?

Richell: It's viable as a niche, but I don't think the industry is interested. System76 isn't interested in niche's either. We'll see what happens when Intel's Medfield and new quad core ARM chips arrive.

The VAR Guy: How are things at System76? Any business updates or trends to share?

Richell: It's an absolute joy building this company and working with the amazing team we have here. We're finding success for our story and products around every corner and growing at a breakneck pace. And we're creating new technology. In our view, the customer experience as a whole defines System76 - from sales questions, to the order process, to the product, and finally support. [This week] we'll launch new technology that greatly enhances the customer experience. One could think of it as Launchpad -- the central collection of tools used to develop Ubuntu -- except completely focused on the System76 customer experience.

Computing in general is entering a new phase. Innovation is alive again! The industry is chaotic. There will be winners and losers. I think Ubuntu and System76 are on the winning side.

Proper Perspective

The VAR Guy thinks it's safe to assume Linux netbooks, particularly in North America, have faced three obvious challenges:
  • The tablet craze;
  • The rise of Windows 7, which gave Microsoft a good story on netbooks (though even Microsoft has reported a big decline in netbook sales);
  • The less-than-stellar power and performance of some netbooks.
Still, this blog isn't predicting doom and gloom for Linux. Richell remains upbeat about the overall Linux market. And there's plenty of evidence to suggest that Ubuntu and other Linux variants -- Android, anyone? -- will continue to evolve for new computing form factors. (The VAR Guy needs to check in with Canonical for additional insights.)

But when it comes to the Linux Netbook craze in North America, it seems to have come and gone as fast as the pet rock -- sinking quickly to the bottom of a chilly pool. Shrinkage. Ouch.