Published on Dec 29 2008
Netbook sales are expected to pass 35 million units by 2012, when the segment will account for nearly one-third of total laptop sales
C all it going small to get big, but a weak economy and expected declines in personal computer sales have nearly all the major PC makers looking at low-cost, streamlined laptops – commonly known as netbooks – as a way to revive the market in the coming years.
The netbook takes the concept of the notebook PC to an even smaller level. A netbook typically has a screen that is less than 10 inches wide diagonally, carries no optical drive, and runs on Intel Corp's Atom processor. Most employ either Microsoft Corp's Windows XP operating system or a version of open-source Linux-based software. Most weigh around 3 pounds or less.
For the consumer, though, the real allure likely comes from the price tag, as many start as low as $349. And PC makers are well aware that the low prices could open up a new market among buyers who may have been holding back from purchasing a computer in the current economic climate.
"We're trying to reconceive the (PC) category," said John New, a global product marketing manager with Dell Inc. "We think that with the new price points and form factors, there is a great appeal to the netbook, especially when parents are looking at purchasing a PC for their children."
Dell launched its first netbook, the 9-inch Inspiron Mini, on September 4, and New said that part of the reason the company has gotten into the market is because making the devices is now economically feasible.
"With notebooks, the prices had gotten lower, but those products aren't designed to compete at those price points," New said. "But netbooks are. They are designed to reach certain price levels from their initial conception."
Aside from Apple Inc., all of the major PC companies have now entered the netbook market. The launch of Asus' Eee PC late last year was largely seen as the catalyst for the sector. According to NPD Group's Display Search, fewer than 1 million netbooks were sold worldwide in 2007, but that figure is expected to rise to more than 14 million by the end of this year. Those numbers are similar to other predictions. IT hardware analyst Toni Sacconaghi of Sanford Bernstein predicts that netbook sales will pass 35 million units by 2012, when the segment will account for nearly one-third of total laptop sales.
"Netbooks represent a new category in the PC market, with their promoters betting that many users will trade off some computing power for a small form factor and very low price," Sacconaghi said. Bob O'Donnell, vice president of clients and displays at IDC, estimates 11.6 million netbooks will be sold worldwide this year, rising to 21.5 million in 2009 and reaching 42 million in 2012. John Jacobs, director of notebook-market research for NPD's Display Search, said the market for netbooks is poised for dramatic growth in the near term due to the low prices for the machines, capabilities that make them perform more like traditional notebook PCs, and the opportunities in new geographic regions where desktop PCs are rare.
The portability of the devices make them well-suited for basic word-processing and work programs, and their ability to connect wirelessly to the Internet is seen as a major selling point.
However, for the consumer, the final determiner of what to buy could come down to the price tag. Prices on netbooks start from as low as $280 for an Asus Eee PC 900A model with a 4-gigabyte solid state hard drive and can increase depending upon changes made to the devices' memory and hard drives.
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