Intel: The future of Netbook vs. notebook
Intel said Netbook cannibalization of notebook PC sales is about 20 percent in Europe, according to a news report Wednesday. But this trend may ebb later this year when the "affordable" ultra-thin laptop category takes off, leading to a cannibalization reversal of sorts.
Christian Morales, Intel's European sales chief, said Netbook sales were about 16 percent of all notebook sales globally, and a little higher in Western Europe, according to Reuters. "In Britain and Italy they may account for as much as a quarter of all notebook sales," he told Reuters.
Netbooks are small, inexpensive laptops--typically below $500--designed for Web browsing, email, and less-demanding media applications.
Intel Netbook share was about 16 percent in March of this year.
(Credit: Intel)Intel's marketing chief, Sean Maloney, presenting at the company's investor meeting on May 12, said that the share of Atom processor-based Netbooks out of the total mobile PC market was about 16 percent in March. (See "Netbooks Mix of Mobile PCs" chart.) And he showed that the market share for Netbooks--month to month--hovers around 15 percent.
"The market has not all lept over to Netbooks," Maloney said at the meeting. "We're very comfortable with having established the (Netbook) category. We believe now that Netbooks are an under-distributed product line." Cannibalization, when it occurs, tends to affect low-end laptops based on Celeron processors, he said. "Atom is eating into Celeron. And we're quite fine with this," Maloney said.
Intel's ramp of inexpensive ultra-thin "CULV" laptops may eat into Netbook sales
(Credit: Intel)Then later in his presentation, alluding to Intel Consumer Ultra-Low-Voltage (CULV) chips due to appear in inexpensive laptops starting in June, he said that this is "an opportunity for upsell. We don't need to give this stuff away. The industry doesn't need to give this stuff away. We can reach new price points and we can also get paid for it." CULV processors will be based, to a large extent, on Intel's Core 2 architecture, which offers better performance than the Atom chips used in Netbooks.
Maloney's comments imply that CULV-based laptops will offer stiff competition for Netbooks, especially high-end Netbooks priced above $400. Many CULV notebooks should fall into the $599 to $799 price range--the upper range of Netbooks--according to Ashok Kumar, an analyst at investment bank Collins Stewart. And some major PC makers expect CULV to become one third of total latop sales by next year, Kumar said.
Though no one can forecast how popular these new inexpensive thin laptops (think: MSI X-Slim series or a hypothetical $800-$900 Apple MacBook Air) will be, Intel is obviously expecting the category to take off. (See "Ultra-Thin Affordable Volume Ramp" chart.)
Maloney said growth markets for Netbooks are children--he said this market is still under-served--as well as Netbook bundles with telecommunications service providers. Verizon, for example, is now offering Hewlett-Packard Netbooks with 3G functionality built in.
Brooke Crothers has served as an editor at large at CNET News, an editor at Dow Jones' Asian Wall Street Journal Weekly, and a senior editor at InfoWorld. His CNET blog covers chip technology and computer systems, and how they define the computing experience. He also contributes to The New York Times' Bits and Technology sections. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. Follow Brooke on Twitter @mbrookec. 
Put Windows 7 on it and I still won't buy it, put Ubuntu on it and I might. Put any other Linux distro on it and I still might.
Now, can we get back to what the article was talking about?
I comment about loving Linux a lot but at least I realize the article is talking about hardware.
They won't go away anytime soon, but they're definitely fading away already. It's currently possible to buy laptops that don't have an optical drive in them.
You may have hit the nail on the head with flash drives.
I keep one in the boot of my car and thus I always have a computer with me wherever I go.
I keep no data on it, my data is kept on a memory stick which I plug in.
Laptops are of course more functional, but I don't like carrying a laptop around with me unless I have to and I am certainly not going to keep one in the boot of my car.
So if I don't have my laptop and I have some time to kill, I can whip out the Netbook and do some coding, surf the Web, or whatever.
It is also very useful as it can play movies. So my young son likes it too.
- by NickNine May 28, 2009 7:07 AM PDT
- The market that is still truly under-served is folks like me that need more than a PDA but do not want to lug around a full size laptop (even a thin one). If I want to do heavy duty graphics or audio I will use a desktop that I can expand, upgrade and modify as needed. For the bulk of stuff I would do on the road an Asus Eee works just fine. As T8 alluded to if one keeps all one's data on an encrypted memory stick then the pain of having a $349 dollar Netbook stolen is not nearly a great as losing a $799 laptop.
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