Netbook Market Explodes

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The market for netbooks, small notebook PCs with even tinier prices, exploded in the third quarter of this year, according to market researcher DisplaySearch, as vendors aimed their wares at students during the back-to-school season.

The global market for netbooks, also known as mini-notebooks, was 5.61 million in the third quarter, up 160% from the second quarter, according to a statement Tuesday from DisplaySearch, the Austin, Texas-based research firm.

Acer Inc. displaced ASUSTeK Computer Inc. (Asus) from the top Netbook spot for the first time during the quarter, taking 38.3% of the market versus Asus' 30.3% share.

DisplaySearch expects sales of netbooks, which are lighter-weight, lower-powered and generally cheaper than regular notebook PCs, to hit 14 million by the end of the year. That's a sharp rise from 2007, when just 1 million were sold.

"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," John F. Jacobs wrote in the report. "We expect the mini-note PC market to settle at approximately 16% share of the notebook PC market by 2011."

Like Gartner Inc., DisplaySearch sees Netbooks as the one bright spot in the overall laptop PC market, which has shown signs of slipping.

DisplaySearch is revising down its growth forecasts for this year and 2009 due to "the challenging economic climate. Even enterprises that are maintaining or growing are likely to stretch their PC replacement cycles out as long as possible," Jacobs wrote.

In the overall laptop market, HP Inc. leads with 19.7% share, followed by Acer with 17.1%. Acer also sells notebook PCs under the Gateway and Packard Bell brands. Its sales were up 65% year-over-year.

Dell Inc. was third with 13% of the overall notebook market, followed by Toshiba and Asus, each with 8.6% of the market. Apple, which does not sell netbooks but has seen strong laptop sales growth in North America, ranked 7th worldwide in notebooks, with a 4.1% share. Sales were up 24% year-over-year, and some analysts have speculated that Apple will release its own netbook in 2009.

Asus, which was a marginal laptop player before introducing its US$400 Eee Netbook PC last October, saiw its notebook sales, including Netbooks, grow 189% year-over-year.

Asus had led the Netbook market by releasing variations on its original Eee in different sizes, prices and operating systems (both Windows and Linux). But driven by strong sales of its popular Aspire One, Acer overtook Asus, shipping 2.15 million Netbooks in Q3.

HP held third place, with 5.8% of the market. Its main model is the Mini-Note 2133. MSI followed with 5.7% of the market for its Wind Netbook.

In fifth place was Dell, with 2.8% of the market, followed by the One Laptop Per Child, which shipped 130,000 PCs in Q3 for 2.3% of the market. Lenovo was in 9th place, shipping just 40,000 units, followed by Toshiba.

Taiwanese makers such as Acer, Asus and MSI hold three-quarters of the Netbook market today. DisplaySearch 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."

This story, "Netbook Market Explodes" was originally published by Computerworld.

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