Netbooks aim to boost PC sales

Call 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.
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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 and 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 Sept. 4, and New said 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 wrote in a Dec. 9 report.

Technology research firm IDC also recently raised its outlook of mini-PCs. Bob O’Donnell, vice president of clients and displays at IDC, estimates 11.6 million netbooks were sold worldwide in 2008, rising to 21.5 million this year 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.

“Demand is forecast to grow rapidly over the next few years,” Jacobs said, citing “a variety of sources, including early adopters, consumer and enterprise PC customers seeking a smaller or secondary notebook PC, as well as new PC customers in emerging markets.”

According to Display Search, Acer was the top seller of netbooks during the third quarter of 2008, with 2.15 million units and 38.3 percent of the market. Asus came in second place with sales of 1.7 million netbooks and a 30.3 percent market share. Hewlett-Packard Co., Micro-Star International Co., and Dell rounded out the top five netbook sellers worldwide.

The major PC makers haven’t released specific sales expectations for their netbook lines, but those companies see the category as one that is ripe for growth. Display search ranks HP as the top notebook company in the world, followed by Acer, Dell, Toshiba and Asus.

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BY Rex Crum
Source：MarketWatch