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Study: Netbook sales growing at 264 percent clip

Oct 9, 2009 — by Eric Brown — from the LinuxDevices Archive — views

A DisplaySearch study shows netbook sales continuing to defy the recession and the slow PC market, growing at a 264 percent rate in the second quarter year over year, says eWEEK. However, netbooks are also eroding ASPs (average selling prices) across the mobile PC industry, claims the study.

Netbooks were the only mobile PC category to show year-over-year growth in the second quarter, says a Michelle Maisto story in an eWEEK story on the DisplaySearch study. The second-quarter 2008 netbook revenue of $848 million was said to have jumped to $2.24 billion in the first quarter of 2009 and 3.07 billion in the second quarter, the latter representing a 264 percent leap.

By comparison, second-quarter 2009 revenue for "ultraportable PCs" was $1.48 billion, representing a year-over-year loss of 31 percent. Larger "portable PCs" with 13- to 16-inch displays earned over six times the revenue of netbooks in the quarter, bringing in $19.73 billion, yet that represented a 13 percent drop year over year, says the story.

Meanwhile, desktop replacement PCs earned $2.09 billion, falling 6 percent, and notebook PCs — netbooks excluded — represented $23.29 billion, a drop of 14 percent. The total notebook PC market for the quarter was said to be $26.4 billion, up 10 percent quarter to quarter but down 5 percent year over year.

Netbook sales are primarily driven by pricing pressures, with the tiny notebooks typically purchased as secondary computers, says the story. Sales are also being boosted by new markets opening up in emerging economies, where netbooks represent a much larger portion of the portable pie compared to the U.S., says DisplaySearch. Sales are also said to be driven by wireless carriers offering low-cost subsidized netbooks with two-year service contracts.

Our prices are insane!

According to John F. Jacobs, director of notebook market research with DisplaySearch, netbooks "have been a significant contributor to volume growth in the portable PC market as their very attractive price points make owning a secondary computer viable for many consumers." The lower prices, however, are "clearly having a negative impact on portable PC market revenue," Jacobs was said to have stated. "For 2009, we expect continued ASP erosion across all portable computer categories, leading to the first [year-over-year] decline of portable computer revenue."

Netbook ASPs fell from $506 in the second quarter of 2008 to $373 in the first quarter of 2009, and then to $361 in the second quarter, representing a 29 percent year-over-year reduction, says the story. (Linux netbooks tend to offer slightly lower pricing than Windows models, such as the $280 HP Mini 110, pictured at right.)

By comparison, notebook ASPs, were said by DisplaySearch to have fallen at a rate of 10 percent, while overall portable PC ASPs fell by 19 percent. DisplaySearch expects these trends will continue into 2010, when it projects netbooks representing 21.5 percent of the mobile computer market's shipment volume , but only 10.9 percent of its revenue, says eWEEK.

And the OS winner is…?

DisplaySearch apparently did not release figures on operating system share for netbooks. The lack of reliable figures on OS share continues to lead to rampant speculation about the respective netbook shares of Windows vs. Linux, where the former appears to have dominated over the last year after a fast 2008 start by Linux.

Whatever the situation, it may well change over the next year, as Windows 7 arrives to replace Windows XP on most netbooks. Meanwhile, Linux-based Moblin v2.0 netbooks are just beginning to arrive, and by the end of the year we'll see low-end ARM-based "smartbooks" running Linux and Android. Next year, meanwhile, we may see a larger selection of netbooks running the upcoming Google Chrome OS.


The eWEEK story on the DisplaySearch mobile computer study may be found here.

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