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Netbook sales set to soar - or not

Reading the tiny tea leaves

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Netbook sales will continue to be strong for the foreseeable future - the only question is how strong.

Between 25 and 30 million of the little fellows will be sold this year, but according to a report Monday by the Taiwanese tech-news site DigiTimes, "some netbook players" are forecasting that 2010 will remain flat, with a like number being sold next year.

However, DigiTimes also notes that the president of Compal Electronics, Ray Chen, is more bullish about netbooks, predicting that their sales may hit 35 million in 2010.

Seeing as how Compal makes netbooks for such heavyweights as HP and Acer, we believe he may have some inside information about his customers' projections.

Today's prognostications come a few days after last Thursday's report by the researchers and analysts at Canalys, which might be best summarized by one quote: "The impact of netbooks has been profound."

According to Canalys, over 13.5 million netbooks were sold during the Meltdown-depressed first half of this year - a figure that makes the prediction of 25 to 30 million to be sold throuhout the year seem more than doable, especially considering the traditionally strong back-to-school and holiday seasons for consumer devices.

Prime suspects

And consumers are the prime market for netbooks. As The Reg noted two weeks back, a recent study by Spiceworks of planned SMB purchasses found that although 55 per cent of those surveyed planned to purchase laptops in the next 18 months, only 13 per cent planned netbook purchases.

But clearly, someone is snapping up netbooks. As DisplaySearch recently reported, netbook sales were a mere 5.6 per cent of the portable-computer market in the second quarter of 2008, but grew to 22.2 per cent in the same quarter this year.

Except that DisplaySearch calls them "mini-note PCs". And Microsoft has renamed them "low cost small notebook PCs" - despite our help in sorting out the telltale markings of a netbook.

But we digress...

The Canalys report is clear on what's driving netbook adoption worldwide: "The biggest change of all has been the success the telcos have had in selling subsidised 3G netbooks, emulating the mobile phone business model."

More than 50 telcos have begun subsidizing netbooks, according to Canalys, with HP leading the way in deals and Samsung "rising quickly." In the US, both number-one wireless provider Verizon and its number-two competition AT&T have inked netbook-subidizing deals, and subsidization partnerships are spreading throughout Europe and Asia, notably in Korea, China, and Japan.

Netbooks are clearly here to say. As to doubts about viability of the netbook market, Intel's PC Client Group boss, Mooly Eden, recently said at a company technology forum: "When people asked this question a year ago, it was fair. Nobody knew. But to keep asking now with more than 25 million [sold] - you can do the analysis, you can check in the market, there are answers."

And the answer is "Yes." The only question is how high and how fast their success will increase. ®

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Latest Comments

Netbook / EEE plus point!

I use my EEE 24/7 for work - mobile monitoring of back end services for an ISP, once familiar with the size, typing can be faster and easier to type with one hand, even stretching over multiple key combinations whilst having other hand free for monkeying around with pint in other! : )

Running GnewSense on asus 900 & well happy!

: )

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Other issues

Traveling folks snapped up a lot of these little gems quick, but for general business, you have a major roadblock: lack of a business class OS option...

This also applies to most college students as bringing a machine on a major university campus oftem means joining a domain and supporting college-required software packages or security apps. A lot of colleges have custom machine images, some refuse to support all but a very select list of machines. Very few let you be a local admin of any machine, yours or not, connected to the campus network.

Given the performance, these are also not commonly primary machines, but secondary specific-purpose machines. (presentations, traveling web access, etc). Most users will have a primary PC in addition to a netbook, so it;s not logical to expect a significant drop in more powerful system sales (though a shift from laptops back to cheaper desktops may occour for the primary machine role).

They're all but useless for school age children (especially those old enough to want to play any games at all other tham minesweeper). Most also can not handle any HD content, and are underpowered or underfeatured as media players, home theater extenders, for streaming HD content from Netflix/hulu, etc.

I think this is more of a fad, combined with a small need for businesses to have cheap light portables for presentations and sales, and that once the market is saturated (it was a previously unfilled nich, thus it;s experienced rapid uptake), and once home users get burned and learn that netbooks are NOT notezBooks in smaller form, the market will stabilize flat, if not decline.

This is also short lived as Windows 7 is going to tax these machines significantly, and supporting them going forward in business, combined with increased user requirements for video, higher res photo support, and 3D on the internet, the performance requirements of these machines will remove the cost margins compared to real notebooks, and then we'll be back to where we were 5 years ago where 10" and smaller machines actually cost more than 13" and larger machines due to the cost of miniturization while maintaining performance.

This is a market segment doomed to die, 2-3 years tops likely.

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Anonymous Coward

@ Gulfie

[quote]Yes, netbooks will sell over laptops, but primarily in the home market. Business will stick with 'proper' machines - a netbook is not something you'd want to do one eight hour day on, let alone five days, think of the health and safety aspects vis a vis workstation assessments,[/quote]

What about a docking station or just a USB keyboard and mouse + LCD monitor. Plug in and use in comfort all day then unplug a nice small item to carry home.

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