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Netbook share will diminish, study says

Dec 29, 2009 — by LinuxDevices Staff — from the LinuxDevices Archive — views

Netbook shipments are expected to total 33.3 million units by year's end, for a year-over-year growth of 103 percent, says DisplaySearch. But in 2010, growth will slow to less than 20 percent, thanks to the new breed of notebook computers with ultra-low voltage processors and sub-$500 price points, the research firm adds.

According to DisplaySearch's Dec. 22 "Quarterly Notebook PC Shipment and Forecast Report," 2009 was an excellent year for netbooks — a conclusion that will surprise no one. By the end of the year, the firm says, more than 33.3 million netbooks will have shipped, delivering total revenue of $11.4 billion, plus year-over-year growth rates of 72 percent in revenue and 103 percent in shipments. A DisplaySearch study released in October reported that the netbook market was growing at a 264 percent rate in the second quarter, year over year.

The low prices of netbooks, or "mini-notes," as DisplaySearch prefers to call them, make the devices attractive to buyers seeking a secondary PC for the home, as well as making them more affordable for first-time PC buyers in emerging markets. Relatively low average selling prices also make netbooks attractive to service providers, who can add to their revenue by using subsidized devices to garner data plan contracts, the firm adds.

But, DisplaySearch adds, while netbook shipments are expected to climb to 39.7 million during 2010, that equates to a year-over-year growth rate of "just" 20 percent. At $11.4 billion, netbook revenues will be flat, due to a decline in average selling prices of more than 15 percent, says the firm.

A key reason highlighted by DisplaySearch for the decline in netbook sales is the advent of the "tweener" — our term, not theirs — portables, offering netbook-like form factors and sub-$500 pricing, but also faster performance. As the analyst firm notes, processors for such devices include Intel CULV (consumer ultra low voltage( parts, and we'd add to this AMD's Athlon Neo MV-40.

According to DisplaySearch, the overall market for portable computers — netbooks included — will have experienced year-over-year growth of 16 percent by the end of the year, where the number of shipments is concerned. Revenue for 2009, however, will be down by 12 percent, due to lower prices in all product categories, the firm adds.

The predicted good news for manufacturers is that this year-over-year decline in revenue will be down to just one percent in 2010, thanks to a shift from netbooks toward tweener devices and ultra-portables. As suggested earlier in this story, year-over-year growth in the mini-note category will fall to 19 percent, while growth for other types of notebook PC will go from five percent in 2009 to 16 percent in 2010, DisplaySearch says.

DisplaySearch director of notebook research John F. Jacobs (right) stated, "Mini-notes continue to be a significant piece of the notebook PC pie, in terms of both units and revenue. However, our long-term outlook is that the mini-note share of the notebook PC market has stabilized, and will remain at approximately 20 percent through 2011 before starting to erode."

"While mini-notes offer lower ASPs and are thinner and lighter than notebook PCs, the performance of larger notebook PCs continues to improve while prices continue to steadily decline, increasing the performance gap while narrowing the price gap," Jacobs continued. "For 2010, we expect further erosion of [average selling prices] across almost every portable computer segment. However, unit growth should be sufficient to offset ASP decline, leading to flat [year-over-year] revenue for the portable PC market."


More information on DisplaySearch's Quarterly Notebok PC Shipment and Forecast Report, for which no pricing was provided, may be found on the company's website, here.

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