How will economic recovery affect netbook market?
7 May, 2009
By Chris Talbot |
The netbook market is in large part being fueled by the economy, which is driving consumers and businesses to lower-cost computers, but when the economy starts to improve, that may slow the growth. Or perhaps not. Analysts differ in their opinions.
While netbooks are being positioned as secondary portable computers, the economic conditions are helping to drive the market, as well. End-users are looking for portable, low-cost computers because of the reduced disposable income, but while the economy is certainly a driving force behind the growth of the market, it's not the only factor.
"I think the thing is it's a complex issue," said Matthew Wilkins, principal analyst for compute platforms at iSuppli. "There's not one reason why a product is successful, very typically. It's a multitude of reasons. We're seeing how these products are being successful in western markets even though they were targeted more at emerging markets, and certainly how the low prices that they are achieving or are being sold for right now is allowing them to gain traction in the market."
Another important factor is that corporations are looking for more cost-effective notebooks, and that's making them look more seriously at netbooks.
"The economy is the primary driver. It's a realization that nobody has enough money to do everything they want," said Rob Enderle, principal analyst at Enderle Group. There are some basic things that end-users want to be able to do, and netbooks are good at those basic things, he said. In a couple of ways, they also have advantages over notebooks -- they're more portable and have better battery life.
Wilkins said that in many ways, netbooks are the right product for the right time. As the economy has worsened and disposable income has been reduced, the low-cost netbook has come along at just the right time.
"There are absolutely demographics that are drawn to these products because they are low cost," Wilkins said.
The growth rate has already begun to slow down, but it's not really fair to gauge netbook growth on percentage. The market has only emerged in the last year, so the phenomenal growth rates of 2,424 per cent (in 2008) are attributable to the fact that there wasn't a market a couple of years ago. That growth rate has, naturally, slowed down, Wilkins said. He noted that netbook annual growth rates are coming more in line with the overall growth rate of the notebook market (which netbooks are part of, based on iSuppli research). The growth rate for 2009 will be about 68.5 per cent.
"People are not buying netbooks because they are truly desirable platforms, but rather because as low-cost PCs, they offer a good mix of features at an acceptable price point," Wilkins said. "With financial motivation a key factor in many netbook sales, growth of the netbook platform is likely to slow down when the economy comes back and consumers have more money in their pockets."
In contrast, Enderle actually expects the economy picking up to give the netbook market a boost. He noted that many trends have kicked off in down markets but have continued even into healthy markets (like the launch of economy cars in the 1970s).
"I think the reality here with netbooks is they're not going away. The desire to save money is pretty much universal," Enderle said.
With the market starting to gain in maturity, and new platforms and competitors entering the space, it will continue to grow, but as the economy improves, the low-end of the overall notebook market will likely get a boost first because those who have been holding onto legacy machines will first look to replace those machines, Enderle said. They're likely to look at netbooks, which will prompt more growth in the market.
"This market's going to get pretty crowded pretty fast as we go into recovery," he said.
Vendors that play in the netbook or netbook components market have already zeroed in on the market, Wilkins said. They're focused on improving the technology, including battery life and power management.
"Netbooks have shown us there is a valid market for low-cost PCs, and that it is possible to produce good systems, quality systems, at those price points," Wilkins said. |
