David Flynn29 November 2009, 4:21 PM
Tech analyst firm Canalys says that while netbooks reduced the PC profit margin they’ve proven their worth by transforming the industry – and being the only market segment to grow.
The big brands may miss the fat sales margins afforded by conventional notebooks, but if it wasn’t for low-cost netbooks 2009 could have been the ‘annus horribilis’ of computing.
European analyst firm Canalys reports that netbooks were “the only PC segment enjoying growth this year”, with 13.5 million of the little low-cost laptops sold worldwide in first half of 2009 alone.
The final tally at years’ end could potentially top 30 million, buoyed by the increase in subsidised netbooks offered by mobile telcos with as part of a contract mobile broadband bundle.
Speaking at last week’s Canalys Mobility Forum in London, company vice-president Mike Welch said that netbooks were three times as likely as notebooks to be used in cafes, public parks or on trains. Indeed, almost half of all netbook owners said they packed the pint-sized portable to take on their holidays.
The netbooks’ extraordinary appeal came at a cost, however. “It forced Microsoft to fend off a threat from Linux by reducing its operating system prices and to continue promoting its ageing XP brand. Netbooks have dramatically lowered industry price points... furthermore, hard-pressed PC vendors have been forced to cut their operating costs to have any chance of turning a profit.”
Canalys CEO Steve Brazier went a step further, saying “Netbooks have been a necessary evil for Wintel. They have kept the industry going this year, but have been detrimental to (Microsoft) and Intel.”
The new horizon for netbooks looks to be as subsidised mobile broadband devices sold by telcos.
Operators are playing a pivotal marketing role for the netbook, says senior analyst Daryl Chiam. “The telcos have massive retail and marketing coverage, so suddenly netbooks are being promoted in newspapers, billboards and storefronts with a prominence never before given to PCs.”
“Netbooks, and smart phones, are finally justifying the telcos’ massive infrastructure investments in mobile broadband. They are seeing data revenues rise quickly to offset falling prices for their voice services”.