Back To The Future For Netbook Sales - Twice

Back To The Future For Netbook Sales

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The hot-selling netbook, as it now exists, may be peaking in popularity, according to several industry sources.

Matthew Wilkins, iSuppli's principal analyst, is predicting that netbook shipments will fall next year as the economy picks up and drop even further in 2013. Netbook shipments are projected to rise 68.5 percent in 2009, with this figure falling to 39.6 percent in 2010 and 13.1 percent in 2013. Wilkens, however, described these depressed shipment numbers as still very impressive growth.

Charles Farmer, Lenovo's consumer marketing manager, backed the thought that the category still has some legs by pointing out that Lenovo's continuing introduction of new netbook models shows its faith that the category remains strong.

iSuppli's definition of a netbook is a portable computer with a fully functional operating system, local storage, keyboard and wireless Internet connectivity. Normal cost is less than $600, and they provide only basic computing capability.

Watkins prediction that netbook shipments are now topping out was backed by Averatec CEO Tae-Hyun (Tiger) Cho.

However, Cho expects a major shift to occur in the category starting late this year or in early 2010 when the netbook category begins to fracture into two camps.

“The netbook will disappear as it is now,” Cho said.

In a Darwinian maneuver, some netbooks will evolve and blend with the smartphone market, while others head upward into the ultra-mobile laptop area featuring 11.6-inch and 12-inch displays, Cho said. The latter will end up being a full-functioning laptop and not a stripped-down netbook.

Wilkens' research also sees the netbook returning to its laptop roots if vendors load down their models with lots of extra features.

He noted screen sizes for newer models are already in the 10-inch range, up from the 7- and 8-inch sizes that have dominated the category. Additional bells and whistles will incur greater cost, thus pushing them closer to the low end of the conventional notebook category.

Already, Watkins noted, there is only about a $100 difference between a standard netbook and an entry-level laptop.

Lenovo also foresees the netbook growing in capability. The company, which introduced its latest netbook, the IdeaPad S10-2, last week, intends to upgrade its model's feature set while retaining the small netbook form factor, said Angela Richter, Lenovo's consumer channel director.

The S10-2, $349, features one of the first signs of this growth with the inclusion of a keyboard that is almost as large as those found on a regular notebook. It features 3G connectivity and, at 1-inch thick and weighing less than 2 pounds, is smaller and lighter then its predecessor, the IdeaPad.

It has a 6-cell battery delivering 30 percent more, or six hours battery life. The netbook also features three USB ports and a four-in-one card reader.

In the end, Cho said, the netbook, with its low price and high usability factor, has put a bright spotlight on the ultra-portable category. This means that in the coming year when more netbooks/ultra-portables hit the market, consumers will be more familiar with them and thus more likely to make a purchase.

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