Netbooks have been the PC market’s bright spot for the past nine months, but sales have slipped recently, and they now face an uncertain future. They are losing some of their price advantage over notebooks and soon will be challenged by a new type of ultra-slim notebook PC with a long battery life.
Netbooks first appeared in 2007 and have been a big success. Sales have far outstripped the predictions of analysts such as Gartner — 14 million units last year, against a forecast of 5.3 milllion — and now make up 20 percent of the portable PC market.
The Asus marketing specialist John Swatton points to “tech novices” adopting netbooks in the way they have adopted mobile phones and MP3 players, which he says “will drive further growth in the netbook market. We are also seeing more and more users purchasing netbooks as a second, and more portable, device to provide connectivity when away from their primary laptop or PC.”
“The netbook has changed the landscape for good,” says Ian Fogg, an analyst with Forrester. “The netbook category has overturned the idea that users should pay a big price premium for ultraportables.”
Ultraportable notebook PCs have been available from companies such as IBM and Sony, but they typically cost £1,500 (US$2,425) to £2,500. Today’s netbooks cost around £200 to £300, which makes them affordable enough for everyday commuters. Women like them because they can fit inside a handbag. Kids like them because they can have their own machine, and they may get one from their school — Dell has just launched a rubberized Latitude 2100 in a variety of colors for the education market.
The netbook has also changed PC retailing, as high-street stores now sell them with USB modems for portable Internet use.
The Gartner analyst Ranjit Atwal says: “Sales through the telecoms channels have opened up a new target market.”
The netbook has even changed the competitive landscape for PC manufacturers. The booming netbook market has not been driven by US companies but by three suppliers from Taiwan: Asus, Acer and MicroStar International (MSI).
On Gartner’s figures for this year’s first quarter, Acer’s sales grew by 26.7 percent in a declining market and it is now shipping roughly as many PCs worldwide as Dell. Because of the success of the Acer Aspire One, the company expects to be the market leader by volume in Europe this year.
However, the netbook market seems to have slowed. US-based DisplaySearch indicates that while first quarter netbook sales were up by 556 percent compared with the same quarter last year, they were down by 26 percent sequentially, compared with the fourth quarter of last year. Notebook sales declined 24 percent sequentially, so netbooks are no longer growing against the market trend.
This may be partly to do with the increase in specifications that has pushed up netbook prices. The classic netbook was cheaper than a notebook because it had a 7-inch screen, a small Flash drive, an Intel Atom processor and used Linux instead of Microsoft’s Windows Vista. Today’s netbooks have 10 or 12-inch screens, 160 megabyte hard drives and run Windows XP. It is still cheaper to make a netbook than a notebook, but the gap has narrowed.
Linux’s failure in the UK market has been striking because the three Taiwanese manufacturers were keen to support it and both Asus and Acer launched their first netbooks with Linux only. But after Microsoft made a cheap version of the supposedly obsolete XP available for ultra-low-cost PCs, Windows took over.
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