Netbook Shipments Jump in First Quarter

An Apple official may have trashed netbooks for cramped keyboards and “junky” hardware, but shipments for the inexpensive laptops are showing no signs of slowing down. IDC last week said worldwide netbook shipments went up sevenfold to roughly 4.5 million during the first quarter of 2009 compared to the same quarter last year. Netbooks comprised approximately 8 percent of all PC shipments during the first quarter. Despite an early backlash due to uncertainty surrounding the device, netbooks have been grabbing more attention since early 2008, said Jay Chou, research analyst at IDC. Netbooks are attractive as secondary devices because of their low prices and small sizes, he said. Low prices helped fuel netbook sales, although people in general have reduced spending during the recession. “People in different areas have different expectations of what [netbooks] are supposed to do. Some of our surveys show students using it as a note-taking device. They don’t want to take a 6-pound [laptop] to campus,” Chou said.Netbooks also meet the needs of many people for Web surfing and word processing. “Vendors are waking up to the fact that people respond to so-called ‘good-enough’ computing. They don’t really need all the power of a Core 2 Duo CPU most of the time. Most of the time CPU usage is about 5 percent,” Chou said. Netbook shipments for the year should double to 22 million in 2009 compared to last year, taking a larger share of PC shipments as the year goes on. Shipments should pick up during the back-to-school season in the third quarter, and possibly jump in the fourth-quarter holiday season. However, shipments may record slower incremental growth starting in 2010 as netbooks become a mainstay of the PC market, Chou said. Chou couldn’t provide exact market-share numbers for each vendor for the first quarter of 2009, but he didn’t expect a change in rankings from the fourth quarter. Acer was the top netbook vendor during the fourth quarter with a 32 percent market share, followed by Asustek, with a 26 percent market share. Following Asustek were Hewlett-Packard, Lenovo and Samsung. Acer President and CEO Gianfranco Lanci recently said the company expects to ship between 10 million and 12 million netbooks during 2009. It shipped just over 5 million netbooks in 2008. Due to seasonal reasons, shipments fell sequentially from the 6.2 million netbooks shipped in the fourth quarter of 2008. Buying activity is higher in the fourth quarter because of the holiday season. Purchases slowed down after the holiday season ended, affecting netbook shipments during the first quarter of 2009. Netbook shipments saw sharp growth in Europe and Japan during the first quarter, Chou said. Japan is usually a market where people crave small things, and netbooks fit into that category, Chou said. Samsung was a relative latecomer to the netbook space but saw plenty of buyers for its NC10 laptop in Western Europe, Chou said. Samsung offered users a better overall netbook experience with a larger screen and a decent-sized keyboard. Telecommunication companies are playing a big part in Europe and Japan to drive the netbook phenomenon by bundling it with telecom services. The trend is also reaching the U.S., with AT&T offering a US$99 Acer netbook with a two-year mobile broadband contract. Netbook adoption will also continue to grow as PC makers add more and more features like bigger screen sizes and better graphics, Chou said. Asus, for example, added a DVD drive to one of its models. Early netbooks have been panned for poor graphics capabilities, but Nvidia has come out with a chip platform that will make it possible to watch full high-definition video on netbooks. There is also a growing interest in netbooks with screen sizes between 9 and 12 inches, Chou said. Early last year, laptops with a 7-inch screen size dominated shipments, but interest waned as laptops with larger screen sizes shipped, Chou said. IDC defines netbooks — which it calls mini-notebooks — as laptops with screen sizes between 7 and 12 inches with low-power processors like Intel’s Atom processors.