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DisplaySearch Calls Mini-Note PCs A 'Bright Spot'

12/08/2008 03:23:00 PM Eastern

Austin, Texas — The mini-notebook/netbook category grew 160 percent quarter on quarter in the third quarter of 2008, according to DisplaySearch, leading the market research firm to refer to the category as the PC industry’s “one very bright spot.”

The market research firm, which just released its Quarterly Notebook PC Shipment and Forecast Report, noted in a recent announcement, “Asus, which had essentially created the market in late 2007, lost significant share as Acer surged to the top spot, capturing more than 35 percent of [the netbook] market.”

DisplaySearch said it expects the mini-notebook market to surge to more than 14 million units by the end of 2008, up from the less than 1 million units the category had in 2007.

DisplaySearch said its latest report analyzes how and why the netbook category is contributing to the growth in portable computing and why it feels these products are creating a new market rather than taking share from an existing segment. It also discusses the struggle early entrants to the category are dealing with as later entrants have entered the category and eaten up part of their share.

In large part, the firm attributes the relative success of the less-expensive mini-notebooks/netbook category — compared to the more expensive ultra-mobile PC (UMPC) category launched in 2005 to 2006 — to the netbooks’ generally low prices plus the devices’ tendency to feature clamshell designs and Windows XP or Linux operating systems, both of which it feels provide continuity for users accustomed to working with traditional notebooks.

“With the lone exception of Apple, all of the top 10 PC brands have entered the mini-note PC market, initially as a response to the competitive threat posed by Asus, but also to satisfy demand from customers for low-priced, thin and very light (less than 3 pounds) products that provide at least a modicum of typical office software functionality and also enable greater mobility,” said John F. Jacobs, notebook market research director and author of the report.

“The demand for greater mobility is especially evident in certain geographies as a number of mini-note PC brands are partnering with telecom providers to subsidize mini-note PCs, much like they do mobile phones. Worldwide demand for these products is forecast to grow rapidly over the next few years with demand from a variety of sources, including early adopters, consumer and enterprise PC customers seeking a smaller or secondary notebook PC, as well as new PC customers in emerging markets. We expect the mini-note PC market to settle at approximately 16 percent share of the notebook PC market by 2011,” Jacobs added.

Though the firm is optimistic about the category, it is still cautious when taking the challenging economic climate into consideration. The firm noted that in spite of “positive demand signs in the mini-note PC sector, businesses are shedding employees, and even enterprises that are maintaining or growing are likely to stretch their PC replacement cycles out as long as possible.” The firm said it expects the dominant PC brands will continue to gain share in the mini-note PC market due to brand power and recognition, and lower cost structure.

In all, DisplaySearch said, “momentum within the industry currently favors mini-note PCs and some brands gained market share year on year on the strength of their mini-note PC shipments. However, this segment of the notebook PC market is still quite new and most of the brands are still fine-tuning their mini-note PC marketing and product strategies.”

The firm’s complete report can be found here.

Table 1: Q3 '08 Mini-Note PC Volume And Market Share By Brand


Mini-Note PC Brand

Volume (millions)

Market Share

Acer

2.15

38.3%

Asus

1.70

30.3%

HP

0.33

5.8%

MSI

0.32

5.7%

Dell

0.16

2.8%

OLPC (One Laptop Per Child)

0.13

2.3%

Medion

0.13

2.3%

Kohjinsha

0.06

1.0%

Intel (Classmate Reference Design)

0.06

1.0%

Lenovo

0.04

0.7%

Toshiba

0.03

0.5%

All Others

0.51

9.1%

Total

5.61

100.0%

 Table 2: Worldwide Combined Mini-Note And Notebook PC Market Share By Brand


Brand

Q3�07 Share

Q3�08 Share

Y/Y Volume Change

HP

21.3%

19.7%

29%

Acer (incl. Gateway &Packard Bell)

14.4%

17.1%

65%

Dell

13.7%

13.0%

32%

Toshiba

9.0%

8.6%

28%

Asus

4.1%

8.6%

189%

Lenovo

8.8%

6.7%

7%

Apple

4.6%

4.1%

24%

Sony

5.6%

4.1%

2%

Fujitsu/Fujitsu-Siemens

4.7%

3.1%

-8%

All Others

13.7%

14.9%

52%

Total

100.0%

100.0%

39%