Wired has a story on how netbooks hit the big time.
Inspired (or perhaps a bit scared) by the OLPC project, Asustek—Quanta’s archrival in Taiwan and the world’s seventh-largest notebook maker—began crafting its own inexpensive, low-performance computer. It, too, would be built cheaply using Linux, flash memory, and a tiny 7-inch screen. It had no DVD drive and wasn’t potent enough to run programs like Photoshop. Indeed, Asustek intended it mainly just for checking email and surfing the Web. Their customers, they figured, would be children, seniors, and the emerging middle class in India or China who can’t afford a full $1,000 laptop.
What happened was something entirely different. When Asustek launched the Eee PC in fall 2007, it sold out the entire 350,000-unit inventory in a few months. Eee PCs weren’t bought by people in poor countries but by middle-class consumers in western Europe and the US, people who wanted a second laptop to carry in a handbag for peeking at YouTube or Facebook wherever they were. Soon the major PC brands—Dell, HP, Lenovo—were scrambling to catch up; by fall 2008, nearly every US computermaker had rushed a teensy $400 netbook to market.