Wednesday 18 July 2018

Netbooks versus notebooks – is the PC industry trying to cannibalise itself?

Sub-notebook PCs are proving popular but can they grow the PC industry?

The new form factor in computing - the netbook - is projected to open up a brand new market for computer manufacturers through the provision of low-cost
computing for consumers and professionals
The new form factor in computing - the netbook - is projected to open up a brand new market for computer manufacturers through the provision of low-cost computing for consumers and professionals

John Kennedy

Laptop computers have been with us for over 20 years now and today they are the largest-selling segment of the personal computer (PC) industry.

But at the height of this success, the PC industry has decided to do something that could either explode the market for personal computing or see the low-cost notebook market blow up in its face. Cue the advent of netbooks or sub-notebook PCs.

These netbooks, such as the Acer EEE PC, typically come with an 8-inch or 10-inch screen and retail for less than €300 or €400. They weigh less than a kilo and can slip into any handbag, schoolbag or briefcase.

The machines generally come with either Windows XP or a Linux operating system, which allows workers to do word processing, write emails, work on spreadsheets and, most importantly, surf the internet via wireless broadband.

Manufacturers such as Acer have formed bundling deals with broadband providers like Digiweb, while Dell has introduced a sleek Mini 9 netbook with built-in 3G broadband from Vodafone. Carphone Warehouse has an offer that includes an Asus netbook, a Nokia phone and a 3 broadband connection for €149. Aldi will have a 10-inch netbook out next week in the Irish market for €399.

But what are the PC manufacturers thinking? Surely these snazzy new devices have the potential to cannibalise the market for low-cost laptops, which are bulkier but can handle heavier workloads and can be bought for less than €400?

Research firm Gartner predicts the PC industry will ship 5.2 million sub-notebooks this year, growing to eight million next year. By 2012, the industry may be shipping as many as 50 million of these devices.

“The demand will be driven by a number of factors, their small form factor and screen, their light weight, their price, their ease of use and basic and sufficient PC functionality,” explains Annette Jump, research director at Gartner.

Jump says Gartner does not expect any major cannibalisation of notebook shipments by sub-notebooks in 2008 or 2009 because there is a significant functionality gap. But from 2010 they will cannibalise low-end notebook PCs if their performances improve and they prove attractive to business users.

“This is an incremental emerging market for us,” says John Roberts, business director for Acer’s EMEA division. “The initial market we envisaged was students, but since we brought our netbooks to market the applications are right across the spectrum. For example, next week I’ll be going to the US on holiday. I’m not going to book any hotels, but will plan my trip as I go along and I’ll use my netbook to reserve rooms.”

Another entrant to the netbook market is Lenovo, which in recent weeks introduced the S9 and S10 IdeaPad devices, which will sell from €349.

David McQuarrie, executive director in charge of notebooks for Lenovo’s EMEA group, says he envisages only a marginal impact by netbooks on the low-cost notebook market.

“We see it as a new category of products. We don’t envisage any significant cannibalisation. If you look at the lower end of the notebook market, most 15-inch laptops are big and bulky and have only a few more bells and whistles than a netbook.

“Early adopters like children will use them, while at the other end of the spectrum, middle-aged people who want to be part of the internet revolution, yet don’t intend to do computer courses, can dive right into email and the internet,” McQuarrie explains.

Carphone Warehouse Ireland boss, Stephen Mackerel, believes netbooks will be the must-have technology item this Christmas. “Young people who want to surf the web and access Bebo and Facebook will want them, while parents who want to book Ryanair flights will see them as being useful too.

“Here is a market with quality, affordable computers with internet connectivity. You will see some very aggressive offers in this space in the coming months,” Mackerel predicts.

© Silicon Republic Ltd 2008

All content copyright 2008, Silicon Republic Ltd — all rights reserved


© Silicon Republic Ltd 2008

Business Newsletter

Read the leading stories from the world of Business.

Also in Business