updated 09:15 am EDT, Fri April 2, 2010
PC builders backing away from netbooks
Growth in netbooks has fallen by extreme levels in the first few months of the year, IDC has found. Netbook shipments will still have grown 33.6 percent year-over-year to 4.8 million PCs, but the growth is far less than the about 872 percent that was seen a year earlier. The decline is such that IDC now believes that most were attracted to the category solely for the price, which usually falls below $500 and lately has made $300 more common.
"Everyone tried to make these [netbooks] out to be a different category," IDC's Richard Shim said. "In fact, people think of them as just another type of PC."
While no updated estimate was available for the rest of the year, leaks have suggested that some major companies are actively backing away from the format. Dell and HP were already suspected of getting out of 10-inch netbooks altogether in favor of larger 'crossover' models. Several Korean and Taiwanese display makers, including AU Optronics and LG Display, are also rumored to have been scaling back their netbook-sized LCD production by hundreds of thousands of units each as both local and American netbook designers have set lower sales expectations.
The decline partly reflects the nature of a saturated market, as many of those who had wanted netbooks now have them. Few of these buyers also have a reason to upgrade, as arbitrary limits on netbook specs by Intel and Microsoft have left many 2010 netbooks only slightly improved compared to systems from two years ago. Many netbooks released through some of 2008 and all of 2009 were forced to use no more than a 10-inch display, a 1.6GHz Atom, 1GB of RAM and no a 160GB hard drive if they wanted to use certain Intel processors or run Windows XP. Most PC makers chose XP anyways, as the excessive performance demands of Windows Vista made it impractical to use; Windows 7 is fast enough to run using a netbook's limited resources.
Apple, meanwhile, may have seen some support for its own stance through the settled-down netbook market. Its leader Steve Jobs is well-known to have trashed netbooks onstage at the iPad unveiling, arguing that they "aren't better at anything" and are really just cut-rate notebooks for those who don't want the usual price or size. The company is gambling that the radically different design of a tablet, along with a more intuitive interface and lighter design, can take market share from the high end of netbooks and in very few cases replace a low-end conventional notebook.