Netbook Growth Expected To Slow Going Forward

Michelle Maisto covers mobile devices, Android and Apple for eWEEK and is also a food writer.

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2009 has been an excellent year for netbook sales, but one industry watcher has warned that growth will slow going forward

Many believe that 2009 has the year of the netbook, with a total of 33.3 million units expected to be shipped by year’s end, but growth will slow going forward.

At the end of 2009, notebook PC revenues are likely to reach $109 billion (£68 billion) – a figure down approximately 7 percent year over year, according to DisplaySearch, but one with netbooks to thank.

In a 22 December report, the firm showed that sales in 2009 grew 103 percent from 2008, with an estimated 33.3 million units shipping in 2009. The tallies squeaked past the firm’s July predictions, which called for sales of nearly 33 million units, with growth just shy of 100 percent.

While the swelling netbook category increased the overall size of the portable PC market, sales of the inexpensive devices were still not enough to offset revenue declines in the ultra-portable and portable classes of notebook PCs.

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Netbook sales are expected to reach $11.4 billion (£7.1 billion) for 2009, up from $6.65 billion (£4.1 billion) in 2008. Ultraportables, however, fell from $8.93 billion (£5.6 billion) in 2008 to an estimated $6.92 billion (£4.3 billion) in 2009. The overall portable PC market fell from $117.09 billion (£73 billion) in 2008 to approximately $109.4 billion (£68 billion) in 2009, and is expected to continue slipping to $108 billion (£67.6 billion) in 2010.

While the star of the moment, the netbook category – which is facing fresh competition from light notebooks with ultra-low voltage processors and falling, sub-$500 (£313) price points – is expected to see its growth slow, with 2010 revenue projected to mirror 2009’s $11.4 billion (£7.1 billion) revenue.

“Mini-notes continue to be a significant piece of the notebook PC pie, in terms of both units and revenue. However, our long-term outlook is that the mini-note share of the notebook PC market has stabilised, and will remain at approximately 20 percent through 2011 before starting to erode, said John F. Jacobs, an anayst with DisplaySearch, in a statement.

“While mini-notes offer lower ASPs and are thinner and lighter than notebook PCs, the performance of larger notebook PCs continues to improve while prices continue to steadily decline, increasing the performance gap while narrowing the price gap,” Jacobs continued. “For 2010, we expect further erosion of [average selling prices] across almost every portable computer segment. However, unit growth should be sufficient to offset ASP decline, leading to flat [year-over-year] revenue for the portable PC market.”

Despite performance specs inferior to those of notebooks, the netbooks’ low price points, generally below $400 (£250), have made them attractive to consumers during the economic recession. Netbooks’ price points, similar to those of smartphones, also encouraged mobile operators to offer them at subsidised prices with service contracts – further spurring their growth.

DisplaySearch expects netbook shipments to rise from 2009’s 33.3 million units to 39.7 million units in 2010 – a modest 19 percent growth, versus the previous year’s 103 percent growth. Notebook PCs, during the same time frame, are estimated to reach 136.3 million units in 2009 and 158.1 million units in 2010, for a healthy growth of 16 percent, versus the 5 percent growth from 2008 to 2009.

Overall, the portable PC category is expected to see 17 percent year-over-year growth in 2010, rising from 2009’s estimated total of 169.6 million units to 197.8 million units in 2010.