Q1 chip sales plunge reveals slowing demand for netbooks
Fad finished?
Demand for Intel's netbook-oriented Atom processors plunged in Q1, but only from computer manufacturers, it seems.
Market watcher IDC this week said that Atom shipments were down 33 per cent during the first three months of 2009 when compared to the final three months of 2008.
So no one wants netbooks now? Not necessarily. IDC reckons that's a sign that computer makers built up big stocks of Atoms during the latter part of last year. During Q1 they were burning through their inventory, the researcher said.
Still, that doesn't imply strong demand from consumers. Said excess inventory suggests vendors' sales expectations were not met - that's why they had Atoms to spare at the end of Q4 2008 - which in turn means demand wasn't as strong as anticipated.
However, that's more likely to be a response to recession than a sign the netbook fad is over.
IDC said it believes Atom accounted for 21 per cent of Intel's shipments of mobile processors during Q1 but only 6.5 per cent of revenues of said.
So almost a quarter of laptop CPU shipments yielded less than a tenth of the money - not a trend Intel would want to encourage, surely?
Worldwide PC CPU shipments dipped as a whole between Q4 2008 and Q1 2009, IDC said, down 10.9 per cent following a dip between Q3 and Q4 2008 of 17 per cent. Unit shipments fell 13 per cent between Q1 2008 and Q1 2009.
Q1 sales revenues were down 11 per cent sequentially and 25.1 per cent year on year, IDC said.
Intel's market share fell 4.7 percentage points to 77.3 per cent in Q1, while AMD's went up by almost the same margin, to 22.3 per cent. ®
COMMENTS
Microsoft has killed the netbook market
Sales were high when NBs were cheap and cheerful. Unfortunately, MS (once again) had missed the boat and had to belatedly dust off XP in order to regain their stranglehold on PC sales.
The problem was that NB's were not up to running XP, so spec's had to be raised and prices raised accordingly.
Now, NBs are neither cheap nor cheerful, we are in the middle of a gigantic global recession and it is "news" that Netbooks are no longer selling in huge numbers.
Go figure.
P.S. Where o where is the Evil Ballmer icon? BillG left the building AGES ago
Things were bound to level off...
This market was bound to level off eventually. No market grows infinitely large. That being said, there are some artificial factors at work here. The most significant one is the restrictions Microsoft places on netbook makers in order for them to qualify for cheaper XP licenses. Virtually all currently-shipping netbooks sport specifications that are at the Microsoft-defined limits and not beyond (though a few are below).
If last year's netbook didn't meet your needs in terms of performance, this year's won't, either. They're pretty much the same in terms of CPU, RAM, disk space, and graphics chipset. And if you bought one last year, the only difference this time is the color of the case or the form factor (generally speaking). There's no incentive to buy a new netbook if you already own one because it's not much of an "upgrade".
Netbooks are virtually as good as they're going to get until Microsoft ships Windows 7 (or Apple ships a netbook to compete, or netbook makers return to Linux - which I'd like to see but don't expect). Once that happens, they can look at dual-core CPUs, more RAM, larger storage, etc. Until then, netbooks are at their specification limits and we can't expect anything really "better". Hopefully pricing will stay roughly the same and specifications go up, otherwise (as has been noted here) the netbook will lose in favor of low-end notebooks with better specs.
Combine a leveling off of specifications, an increase in price range (as noted by others here), and a slow economy... a leveling off of netbook sales is practically guaranteed... Even a decline in sales would make sense. Once the "XP Limits" are removed, I think we'll see some very interesting stuff in the netbook space. In the meantime, expect a lot more of the same old thing... and a decline in overall interest.
Fad? Don't think so...
Join the queue at LHR T1 and watch the laptops being disgorged into the scanner. Last year, Dell, Dell, Dell, Vaio, Mac... This year, Asus, Samsung, you know the rest.
You can tell who's downsized, they walk taller. And they smile more; they run XP.
Yes, the portable computer formerly known as Netbook is here to stay.
RE: Cause they all suck?
You mean a proper laptop? Of course, with that kit you’ll have both cack battery and higher prices. I agree that they are all the same these days, and have grown to be too big, but with a rubbish resolution. My 5 year old Vaio has a 10 inch screen at 1280x800 and of a high enough quality that I can not only use it productively but also not get eyestrain. Of course, it did cost about six times the original Eee, or three times the newer Eee’s!!
Interestingly, if you have a look at what they are releasing in the Far East, you can see all sorts of machines not sporting Atoms, with stuff like detachable screens, and of the sub-10 inch size. Of course, it is doubtful any of these will see the light of day over here…
