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Netbooks hurt whole notebook industry in 2009

updated 09:55 am EST, Tue December 22, 2009

Netbook growth to slow down in 2010

The rise of netbooks has almost uniformly damaged the entire notebook industry's performance this year, a new DisplaySearch study shows. While shipments of notebooks more than doubled to 33.3 million, their lower prices actually dragged down revenue for the entire notebook industry by 12 percent to about $109.4 million. The revenue for netbooks themselves was also disproportionately lower and increased a relatively soft 72 percent.

Findings from the researchers also suggest the mini portables, combined with the economy, may be eating away at the pricing and shipments of full-size systems. Shipments of conventional notebooks were up 5 percent to 136.3 million this year, but the average selling price of these computers fell rapidly compared to 2008, ranging from 12 to 13 percent for desktop replacements and regular notebooks to a sharp 23 percent for ultraportables.

The industry may still lose about 1 percent of revenue in 2010 but, based on estimates, should ultimately be healthier precisely because netbook shipments will have slowed down. The maturation of the field could have its shipment growth slow to just 19 percent and its revenue drop just a tenth of a percent. This may have an unusual positive effect on the rest of the industry: while most notebook categories are still expected to face single-digit revenue drops as their prices decline further, the desktop replacement class could have its revenue jump 21 percent and shipments for non-netbooks increase by 16 percent.

The shift is explained as the result of an increasing gap in notebook designs. As notebooks with screens over 16 inches become more affordable, they're increasingly likely to replace both desktops and smaller notebooks as they become fast enough for the price. At the same time, those who want smaller, cheaper systems are now more likely to simply pick a netbook instead of a smaller but traditional design. In 2010, ultraportables should get a boost as Intel's CULV (Consumer Ultra Low Voltage) processors become more popular and put many systems at or below $500, or within striking distance of netbooks.

The calculations may help justify decisions by companies like Apple to avoid entering the netbook space, as it has earned record revenues while keeping relatively high profit margins and average prices. Competitors like Dell in the meantime have seen plummeting income as their willingness to sell netbooks and shift to budget notebooks has sent many buyers away from higher-end PCs. Among Windows PC developers, only companies that base large portions of their business on netbooks, like Acer and ASUS, have normally profited from the current market.





By Electronista Staff
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Comments

  1. climacs

    Forum Regular

    Joined: Sep 2001

    0

    can you hear that?

    It's Jobs and Schiller saying, 'we told you so.'

  1. cmoney

    Mac Enthusiast

    Joined: Sep 2000

    -4

    Million?

    I do not think it means what you think it means.

  1. DanielSw

    Fresh-Faced Recruit

    Joined: Aug 2009

    +3

    Heh.

    It's actually a type of greed--always looking for the cheapest price.

    And it's stupidity on the part of these companies--always looking at just the money, not the viability.

    It's all deserved.

  1. dliup

    Fresh-Faced Recruit

    Joined: Jan 2006

    +2

    @cmoney

    Yeah, someone got confused about billion and million.

    Always suspected sometimes macnn uses trained monkeys for writing articles. =p

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: Heh

    It's actually a type of greed--always looking for the cheapest price.

    That's right! Damn the consumers and their wish for lower prices! And who cares if a netbook does all they need it to do! These companies should just stop selling these things and move into the $1000+ range for all their laptops. Then they'd make more money!

    And it's stupidity on the part of these companies--always looking at just the money, not the viability.

    That makes no sense. The only company that's looking at 'just the money' is Apple, for they're the ones NOT selling cheap netbooks. The companies selling the netbooks are the ones meeting the wants of the consumers for affordable computers. And revenues and profits are suffering because of it.

    The only thing these companies are stupid at is being involved in a standard capitalistic market. Apparently what you think would be best if they all colluded to drive prices back up. Then everyone would be better off. Oh, wait, except the consumer. But who cares about them!

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -1

    costs

    I also find it funny how everyone can decry the RIAA and the movie industries for over-pricing their products, and yet laugh at Dell, Acer, et. al. for not artificially keeping prices high.

    Exactly how would you like prices set?

  1. thesearcher

    Dedicated MacNNer

    Joined: Mar 2002

    +2

    Wait...

    Prices of computers are going down over time? That's too much information at once...

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    -2

    Cheapsters galore...

    I'm not sure if the U.S. always was like this, but over the past couple of years it seems that the idea of quality just went out the window. No long-term thoughts at all. Just gimme cheap. I also blame analysts for trying to praise companies that sell garbage. They think they're doing consumers a favor. Total bullsh!t. They think that having a company operate on low margins is going to be good in the long run. I don't think so. The consumer is just getting c*** goods for a low price. What's so great about that.

    If companies can't provide decent goods for a low price, then I think it would be best if the companies colluded to drive prices back up as long as the quality of the goods and customer support goes up. If companies have to close plants it is obviously not going to be good for local economy and it can easily have a domino effect in any region.

    I don't have an answer to artificially jacked prices. I only know that if companies go out of business, then they're not making enough money to stop their companies from failing. If the competition dies out, the prices are going to climb up still from the few companies that survive.

    You cheapsters can get any c*** you want and be happy with it. Fine. Good for you. There must be a lot of people that aspire to crappy products. I don't. Not from any manufacturer. If consumers believe that quality goods come cheap, then I guess the times have really changed. I'd hate to have to work for your company because it wouldn't be in business for long and the conditions working there would likely be just as crappy.

  1. thesearcher

    Dedicated MacNNer

    Joined: Mar 2002

    -1

    Rubbish

    Directed at iphonerulz rant.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -1

    Re: Cheapsters

    I don't have an answer to artificially jacked prices. I only know that if companies go out of business, then they're not making enough money to stop their companies from failing.

    I'm sorry, what companies (besides Psystar) is going out of business? Or do we now look at any company that doesn't have huge margins or whose profit has dropped recently as being 'on death's door'?

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