Evidence Rises That Netbooks Cannibalize Notebook Sales

June 11, 2009

For months executives at high-tech companies, such as Intel, have claimed netbooks are not cannibalizing sales of more traditional, fully featured notebooks.

Evidence to the contrary is rising.

In a PC market forecast released Thursday, IDC claimed that these “mini notebooks” are having a dramatic impact on the market.

IDC says netbook sales in the first quarter helped quash the notebook business

IDC says netbook sales in the first quarter helped quash the notebook business

In the first quarter, shipments of 5.7 million netbooks helped contribute to a 3.1-million unit decline in the traditional notebook sales, the firm said.

Revenue suffered even more. Netbooks brought an additional $2.2 billion of sales to the PC market. But the drop in notebook revenue was $8.4 billion.

“Mini Notebook pricing is expected to rise with more robust models, and shipment growth is expected to slow with the release of low-cost, thin-and-light Intel CULV and AMD Congo-based (notebooks) this fall,” says IDC.

However, netbooks will rise to 17.3 percent of all portable PCs and that will drive shipment value down 17.7 percent this year.

Yes, I would call that cannibalization.

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Posted by Mark Boslet

Netbooks Are Laptops

June 5, 2009

Netbooks are cheap and selling like hotcakes.

But they will never make up the majority of the market, says Microsoft Chief Software Architect Ray Ozzie.

Traditional laptops built on Windows and Intel-based chips will still account for the majority of sales, Ozzie said Thursday at the Churchill Club in Palo Alto.

Netbooks will never be the majority of the market, says Ray Ozzie

Netbooks will never be the majority of the market, says Ray Ozzie

That’s because most people who buy netbooks expect to use them as laptops and not as stripped down, browser-based devices for roaming the Web.

They expect to install Office and to download PC-oriented software. And if the devices fail to do everything they want, they will be disappointed.

These expectations will work against ARM-based netbooks because ARM chips aren’t built to run all the world’s PC software, says Ozzie. “It will be a different type of device.”

As for the opportunity facing Microsoft, Ozzie said the company’s forth coming Windows 7 will run well on netbooks. Up to now, PC makers have used Windows XP and Linux, but not Microsoft’s more memory-demanding Windows Vista.

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Posted by Mark Boslet

ARM Struggling To Bring The Full Internet To Netbooks

April 13, 2009

An interesting story in the EE Times highlights the difficulties ARM is experiencing as it tries to bring the full Internet to ARM-based netbooks.

ARM chips are in numerous Internet devices, but the latet version of Flash is not

ARM chips are in numerous Internet devices, but the latet version of Flash is not

ARM is battling Intel on this crucial front of the computer and mobile-device wars. Intel hopes to push into ARM’s traditional market with its low-power, low-cost Atom chip – and so far has had noted success with low-cost laptop-like netbooks.

Intel claims its greatest advantage is that its x86-based computer chips work well with Net technologies, such as Adobe’s Flash.

ARM responded last fall by ageing to work with Adobe to bring the lastest version of Flash to ARM-based mobile devices.

But EE Times says it continues to struggle with poor video support for its devices and with software fragmentation. Half a dozen or so variants of Linux run on ARM devices and there are no standards for how they interact with Web-based applications.

People are working hard to bring Flash to ARM, which would improve video support, says the EE Times.

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Posted by Mark Boslet

PC Industry To Post Worst Decline In History This Year

March 2, 2009

The personal computer industry needs to brace for the worst decline in its history, with shipments falling 11.9 percent this year.

Say goodbye to the desktop: down 31.9% ths year, says Gartner

Say goodbye to the desktop: down 31.9% ths year, says Gartner

The plunge will be more than three times as deep as the previous worse case: the 3.2 percent drop in 2001, says Gartner.

Emerging markets will continue to grow, but at a slow pace of 11 percent. Mature, developed markets will slump 7.9 percent.

Netbooks will help blunt the fall, with shipments almost doubling to 21 million this year from 11.7 million last year. But they won’t be plentiful enough to buoy a market with 257 million units.

Gartner says overall, notebook PCs will rise 9 percent in volume while desktop PCs fall 31.9 percent.

Prices also will decline. The notebook with an 8.9-inch screen that sold for $450 at the end of 2008 will sell for $399 by the end of 2009.

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Posted by Mark Boslet

Google Indicates Netbooks Running Android Are On The Way

February 26, 2009

The rumors are flying fast and furiously. Asus is said to be working on an inexpensive netbook running Google’s Android software for smart phones.

Android, apparently coming to a netbook near you

Android, apparently coming to a netbook near you

Other manufacturers are believed to be dipping their toes in the same water.

Well, Google came as close as possible to verifying the computing industry’s nascent love affair with Android on Wednesday at the Goldman Sachs Technology and Internet Conference.

It will drive netbooks, said Alan Eustace, senior vice president of engineering and research. In fact, Hewlett-Packard is one such computer maker working with Android now, he said.

The company wants to build netbooks are very low prices, Eustace told investors during a late afternoon presentation.

Fueling the interest is the growing number of Android devices presently under development. “We have a healthy ecosystem in the sense that lots of devices are coming out,” he said, referring to the numerous smart phones expected this year.

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Posted by Mark Boslet

Intel And Nvidia Battle For Position In The Device Market; Nvidia Sees $99 Device

February 16, 2009

Intel and Nvidia are battling for the high ground in the emerging market for pocket-sized Internet devices.

Nvidia expects to see a $99 Internet device

Nvidia expects to see a $99 Internet device

Both chip makers plan to announce new “platforms” – combinations of chips and other circuitry – at the Mobile World Congress in Barcelona on Monday as they duel to be the favored supplier to manufacturers. Arm Holdings also competes in the market.

The Nvidia announcement comes with the dramatic claim that its Tegra 600 integrated chip will enable always-connected, HD-capable mobile devices that can go for days between charges and which cost only $99.

For its part, Intel is unveiling a key design win for its next generation Moorestown technology with LG Electronics. LG plans to make a pocket-sized mobile Internet device with cell-phone capabilities.

It is expected to reach the market in 2010.

Nvidia says a $99 Tegra-based device could make use of wireless Wi-Fi Internet connections, work with 3G cellular technologies, run Microsoft’s Windows CE operating system, support a Web browser and handle telephone calls. It says the platform has so far attracted the interest of device maker ICD.

The company believes telecom carriers may subsidize the device, offering it for free in exchange for service agreements. Devices should be available in the second half of the year.

Further, Nvidia claims its Tegra technology offers longer battery life and costs less to manufacture than Intel’s Atom chip, which is presently used in low-cost netbooks and mobile devices.

Intel says the LG device also will use 3G cellular technologies to connect online and will run the Linux-based Moblin v2.0 software. Moorestown relies on Intel’s low-cost Atom processor, but reduces power consumption to a tenth of what the present Atom platform requires.

Moorestown is on schedule to launch in 2010, and the LG design is expected to be among the first Moorestown products on the market.

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Posted by Mark Boslet

Symantec Plans Online Backup For Netbooks, Appears To Write Down Veritas Merger

January 29, 2009

Symantec reported a solid third quarter on Wednesday but fell to a loss on a huge charge that appeared related to its 2005 acquisition of Veritas.

A moment of financial truth?

A moment of financial truth?

The security software company said it wrote $7 billion off its balance sheet as an impairment to goodwill. It declined to say on a conference call whether the impairment was due to a particular acquisition and said only that it related to enterprise products – which was Veritas’ focus.

Symantec purchased Veritas for $13 billion.

For the quarter, the company said revenue fell 0.9 percent despite the tough economy and that, without the charge, its profits would have increased 20 percent. Revenue was ahead of company expectations.

The Silicon Valley software maker also released that it plans an online backup product for fast-growing netbooks. The stand-alone Norton backup product will enable netbook users to store information, such as photos and music, online.

Already Symantec has been working to get a free trial of its existing software on netbooks from companies such as Asus, said Chief Operating Officer Enrique Salem.

During the quarter, Symantec kept a tight lid on costs, shedding 950 jobs even while adding 811 employees from acquisitions.

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Posted by Mark Boslet

Netbook Sales Expected To Take Off

January 26, 2009

Netbooks proved the 2008 phenomenon in an otherwise unexciting computer market – the only bright spot when sales tanked toward the end of the year.

Sahipments of these inexpensive, lightweight and more energy-efficient laptops designed for wireless Web communications came to about 11 million for last year.

Sales estimated to triple this year

Sales estimated to triple this year

They appear ready to take off in 2009, perhaps finally cannibalizing sales of traditional notebooks, as some in the industry have feared but so far denied.

ABI Research estimates shipments of netbooks could come to nearly 35 million in 2009 and rise to 139 million by 2013.

“The advent of low-cost, power stingy x86 (processors, such as Intel’s Atom) and ARM processors were the technical keys,” says ABI.

“In recent years, the industry still expected smartphones to be more than they turned out to be, and most recently, MIDs (mobile Internet devices) were thought to be the next big mobile devices segment,” says Practice Director Kevin Burden.

What the techies overlooked was the compelling nature of price.

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Posted by Mark Boslet

Apple Pans Netbook Market

January 21, 2009

Apple said Wednesday it is not interested in playing in the market for netbooks.

Sales of these cheap and sometimes miniature laptops that sell for $500 or less have been hot in recent months.

Netbook screens are small and keyboards cramped, says Timothy Cook

Netbook screens are small and keyboards cramped, says Timothy Cook

“We think products there are inferior,” said Apple COO Timothy Cook, who took over day-to-day operations at the company from Steve Jobs earlier this month. “We don’t think people will be pleased with those products.”

Cook said the machines aren’t powerful enough to satisfy consumer needs. Keyboards are cramped and screens are small, he added.

Rumors have suggested Apple may be developing a product for the market. Cook didn’t say one way or another.

“We’re watching that space,” he said.

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Posted by Mark Boslet

Netbooks Not Cannibalizing Notebook Market And, Oh, No Price War Planned, Says Intel

January 15, 2009

Intel answered critics Thursday by saying inexpensive netbook portable computers are not significantly eating away at the sales of more fully featured notebooks, as detractors assume.

Intel expects to do well in netbooks over the next couple years

Intel expects to do well in netbooks over the next couple years

“There is some cannibalization, but the data suggests the vast majority of netbook sales are incremental,” CEO Paul Otellini said on a fourth-quarter earnings conference call.

Netbooks, which can sell for less than $500, have been among the hottest products in the computer market, especially among budget conscious consumers. Intel said it anticipated machines running its low-power Atom processor would do well in 2009, and that Atom sales would grow substantially.

“I would expect we will do very well in the netbook market over the next couple years,” says CFO Stacy Smith.

On a separate topic, Intel vowed not to restart a price with rival Advanced Micro Devices. Chip prices fall as new products come to market. But price reductions in 2009 will not come in reaction to the “external environment,” Intel said.

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Posted by Mark Boslet

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