Netbooks swallowing notebook market whole

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Revenue from computer sales is down by 20 percent despite a 1 percent increase in shipments. This is because netbooks are cannibalizing sales of desktops and notebooks alike.

It is odd, to me, that people can use these things as “main machines” — I, for one, cannot. The fact remains that people are making do, however, and it’s like a wrecking ball going through the industry’s profit margins. From Gartner:

The growth driver for the 2008 holiday PC season was the mini-notebook segment. With more vendors offering creative sales promotions, the mini-notebook segment outpaced overall mobile PC growth. However, PC revenue experienced a record decline. Steep average selling price (ASP) declines, as well as robust growth of low-priced systems, including mini-notebooks, contributed to this drop.

This is why certain branches of Intel are getting antsy about the segment: it likes selling Atoms, but it likes selling Core 2 Duos much, much more.

“Mini-notebook,” by the way, is the new phrase analysts and Intel competitors are using to avoid “netbook,” which is loaded with Intel Atom associations and an unresolved trademark issue with Psion.

Source [BusinessWire]

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11 Responses to Netbooks swallowing notebook market whole

  1. Tensegrity says:

    I think it’s wonderful that manufacturers are responding to true customer needs (in this case for basic, affordable computing) instead of pumping up demand for overpriced goods that few consumers really need.

    In a down economy people, it’s wise and natural for people to want high value products that meet basic needs. In the long run, it’s also a more sustainable mode of consumption.

  2. krylon says:

    My dad needs to check email and occasionally browse online. He spends less than 30 minutes a day at a computer.

    Many people work at computers all day and when they get home do not need anything greater than a word processor to do their own letter writing, etc.

    Most people do not need faster computers than what they have now. Most people buy new computers because they don’t realize that a dry install of system software (OLD system software, not Vista) will solve many of their frustrations.

    So while I, a geek, want a macbook, most people I know would be happy with eees. I know my dad adores his over his Dell.

  3. Lonin says:

    The biggest thing I use my laptop for is HD playback and output to larger screens. I’d love a netbook form factor that could do that, as lugging around my old Dell 17″ is a bit of a pain in the ass, but the only netbook I’m aware of that can consistently playback HD content is the Asus N10 which runs $600+. I really wish Nvidia’s Ion platform would get here ASAP.

  4. strider_mt2k says:

    Okay, okay, “mini-notebook” it is.

    Keep in mind that I enjoy tinking with this stuff but…
    To be honest, I did drop in more RAM and re-installed the OS to make my Dell Mini 9 run how I like it.
    Actually I replaced XP Home with XP Pro as well, but that isn’t necessary for most folks.

    -so maybe a couple of bucks and some elbow grease to put ‘em where they really pop.

    Aside from that, however, it’s been a great machine to carry around, and hack on and even modify.

    They won’t be for everyone, but then again, what is?

  5. CraziestGadgetsdotcom says:

    the average user just surfs the web and maybe uploads some pictures, which netbooks are fine for.

  6. Rob Beschizza says:

    I’ve loved almost every netbook I’ve used: just need a little bit more grunt, to power large displays and such when docked.

  7. LeSinge says:

    Are we sure they’re not creating a cause-and-effect relationship where there isn’t one? A large portion of the population perhaps holding off on buying an $800+ computer as long as possible, meanwhile a smaller portion of the population buying netbooks for their intended use–a second or third computer?

    Basically, notebook/PC are down because most people are holding off on replacing their computers, while netbook sales are up because they fulfill a new niche. Just my theory anyway.

    I DO agree that most casual users I know, all they do is email and surf the web. Maybe upload pictures to flickr/facebook/picasa/etc.

  8. wohali says:

    Rob, it seems to me most people who bought mini-notebooks did so for very lightweight use – or as a toy. There is also a segment of not-so-well-advantaged people buying them, e.g. students who can’t afford anything else and just need to take notes/word process on the go.

    Offhand, they must have small fingers…

  9. zyzzyva says:

    How many users actually ever do anything with a desktop or notebook that can’t be done with a mini-notebook? I haven’t seen any studies, but I’m guessing it’s somewhere around 10% at most (I’m talking general users here, not BBG readers). For that other 90%, a mini-notebook works just fine. Sure, they might like a bigger keyboard and monitor. The former is easy enough via USB. Not sure about the monitor.

    Hell, if I could use a Bluetooth keyboard and copy/paste on my iPhone, I’d have no need for a notebook either.

  10. dculberson says:

    I bought a fancy laptop for personal use and really find myself questioning the wisdom sometimes. The only thing I do that taxes it is watch downloaded HD videos. Other than that, well, my gaming is limited to casual games (I use consoles are for “serious” gaming) and I web browse and fiddle with stuff.

    The only thing a Netbook couldn’t offer me is a comfortable back-lit keyboard and larger, highres screen. Apple or Dell, step up to the plate!

  11. monopole says:

    I still use an uber desktop for browsing, storage and transcoding at home, but my eee gets the job done otherwise. If you stuff a monitor keyboard and mouse on it, it is more than enough for most needs.

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