Two major trends have
catapulted netbooks to the fore, says ABI Research: new low-cost, low-power, high-performance processors such as the Intel Atom (and soon,
ARM-based processors like Freescale's i.MX515), as well as a realization that smartphones cannot currently meet all the needs of mobile users. These and other "social and technological factors" have created a "perfect storm" that will lead to a boom in the netbook market over the next few years, says the research firm.
Over the last year, dozens of startups and mainstream computer vendors have entered the netbook market, including the new
CherryPal Bing (pictured at top). Another
recent netbook study, by DisplaySearch, noted that the netbook category grew at a quarter-to-quarter rate of more than 160 percent in the third quarter 2008.
Right-sizing the mobile spaceAccording to ABI, both the netbook and devices like Intel's mobile Internet Device (MID) format have emerged due to a recalculation of overblown expectations of the smartphone. "Today, with a better understanding for what a smartphone is, is not, and may never be, along with a reality check on the usefulness of UMPCs, the market remains open for new device types," stated ABI Practice director Kevin Burden. He added that the new Windows XP- and Linux based mini-notebooks may now have "right-sized" mobile technology.
Interestingly, it appears that ABI may be backsliding on its earlier enthusiasm for MIDs as one of the rival
UMD (ultra mobile device) formats rivaling netbooks. In September, the group
predicted that over 200 million MIDs would sell in 2013, thereby eclipsing netbooks. While this would indeed surpass the 139 million in sales ABI now projects for netbooks for that year, Burden went on to state that, until recently, "MIDs were thought to be the next big mobile devices segment, but an unclear usage model continues to confuse the market. So today, netbooks' time has come."
Breaking a business modelAlthough not noted specifically by ABI, a
New York Times story mentions additional factors that may be encouraging netbook purchases. These include the recession, which is encouraging consumers to hunt for bargains, as well as the trend toward watching TV shows on the Internet, and the role of Linux in bringing down prices.
Acer Aspire One
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The
New York Times story, "$200 Laptops Break a Business Model," links
Microsoft's recent financial woes at least in part to both the netbook craze and the rise of Linux. Noting the rise in online TV viewing, the Times story suggested that with consumers cutting costs due to the tough economy, many realize they do not need a powerhouse computer for most Internet-related activities.
As for Microsoft's financial problems, the story noted, "The popularity of Linux, a free operating system installed on many netbooks instead of Windows, forced Microsoft to lower the prices on its operating system to compete." While approximately 80 percent of netbooks now run Windows XP in preference to Linux, according to Microsoft, they do so via a loss-leader edition known as
Windows XP ULCPC. Though Microsoft has not disclosed how much it charges manufacturers for each copy, the product apparently does little to boost the software giant's bottom line.
AvailabilityABI Research's netbook report is part of its larger "Mobile Devices Annual Market Overview." More information on the report may be found
here.
The
New York Times story by Brad Stone and Ashlee Vance, "$200 Laptops Break a Business Model," should be
here.
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