Nearly 35 million netbooks will ship this year, rising to 139 million in 2013, predicts ABI Research. Meanwhile, the mainstream media is increasingly reporting on the netbook trend, with a recent New York Times story noting Linux's role in driving down prices and giving Microsoft fits.

Two major trends have catapulted netbooks to the fore, says ABI Research: new low-cost, low-power, high-performance processors such as the Intel Atom (and soon, ARM-based processors like Freescale's i.MX515), as well as a realization that smartphones cannot currently meet all the needs of mobile users. These and other “social and technological factors” have created a “perfect storm” that will lead to a boom in the netbook market over the next few years, says the research firm.

Over the last year, dozens of startups and mainstream computer vendors have entered the netbook market, including the new Linux-ready CherryPal Bing (pictured at top). Another recent netbook study, by DisplaySearch, noted that the netbook category grew at a quarter-to-quarter rate of more than 160 percent in the third quarter 2008.

Right-sizing the mobile space

According to ABI, both the netbook and devices like Intel's mobile Internet Device (MID) format have emerged due to a recalculation of overblown expectations of the smartphone. “Today, with a better understanding for what a smartphone is, is not, and may never be, along with a reality check on the usefulness of UMPCs, the market remains open for new device types,” stated ABI Practice director Kevin Burden. He added that the new Linux- and Windows XP-based mini-notebooks may now have “right-sized” mobile technology.

Interestingly, it appears that ABI may be backsliding on its earlier enthusiasm for MIDs as one of the UMD (ultra-mobile device) formats rivaling netbooks. In September, the group predicted that over 200 million MIDs would sell in 2013 (86 million of which would run Linux), thereby eclipsing netbooks. While this would indeed surpass the 139 million in sales ABI now projects for netbooks for that year, Burden went on to state that, until recently, “MIDs were thought to be the next big mobile devices segment, but an unclear usage model continues to confuse the market. So today, netbooks' time has come.”

Breaking a business model

Although not noted specifically by ABI, the New York Times story mentions additional factors that may be encouraging netbook purchases. These include the recession, which is encouraging consumers to hunt for bargains, as well as the trend toward watching TV shows on the Internet, and the role of Linux in bringing down prices.

Acer Aspire One (Click for details)

The New York Times story, “$200 Laptops Break a Business Model,” links Microsoft's recent financial woes at least in part to both the netbook craze and the rise of Linux. These same trends have been noted by, among others, Bloomberg.com, which recently stated that Linux-ready netbooks such as the industry-leading Acer Aspire One (pictured at right) have cut into Microsoft's bottom line.

Noting the rise in online TV viewing, the Times story suggested that with consumers cutting costs due to the tough economy, many realize they do not need a powerhouse computer for most Internet-related activities. As for Microsoft's financial problems, the story noted, “The popularity of Linux, a free operating system installed on many netbooks instead of Windows, forced Microsoft to lower the prices on its operating system to compete.”

Microsoft's Linux problem extends to the corporate world, suggests the story, noting that the job search engine Indeed.com “shows a thriving job market for MySQL and Linux developers.” The article quotes from the Linux Foundation's Jim Zemlin, who echoes the continuing high demand for Linux developers. The Times then concludes, “Linux has proved popular as well on a new crop of smarter devices — be they phones, TVs or set-top boxes — that have captured software developers' imaginations. The new products they build will undoubtedly challenge the status quo.”

Availability

ABI Research's netbook report is part of its larger “Mobile Devices Annual Market Overview.” More information on the report may be found here.

The New York Times story by Brad Stone and Ashlee Vance, “$200 Laptops Break a Business Model,” should be here.

 
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