I’ve seen a number of reports over the last few months about how the Netbook segment of the computer industry is leveling off or even declining. The latest update comes from CNET, which reprots that Intel and researchers IDC are both suggesting that Intel Atom chip shipments are representing a smaller portion of overall microchip shipments than they were last year.

But there are a few implicit assumptions in this type of article. First is the idea that the term “netbook” only applies to laptops with Atom chips. Second is the fact that the term “netbook” actually matters at all.

If we never use the word netbook again, I don’t think it will really change things very much. What did change things was the introduction of a new class of low cost ultraportable computer. A few years ago a 3 pound computer with a 10 inch display would have set you back a few thousand dollars. Today you can get one for a few hundred bucks.

If people are starting to move away from the typical 10 inch machine with 1GB of RAM, a 160GB hard drive, and Windows 7 Starter Edition, that doesn’t necessarily mean that they’re going back to paying thousands of dollars for a more powerful machine. Instead, netbooks have shown demand for less powerful, but affordable systems. And the selection of computers with 11.6, 12.1, and 13.3 inch displays is greater today than I’ve ever seen it — and many of these laptops are available for $700 or less. Many are powered by moderately low power chips from Intel and AMD which provide better-than-netbook performance and reasonably good battery life.

At the same time, Apple has revived interest in affordable tablet-style devices with the introduction of the iPad. It doesn’t use an Atom processor either. Instead, it has an ARM-based chip which provides 10 or more hours of battery life and always-on capabilities so that you can receive incoming messages even when the tablet is suspended.

I don’t think we’ll see $300 computers with 10 inch displays and Intel Atom processors disappear overnight. In fact, Intel seems to think that they’ll continue to make up about 20 percent of the notebook space for a while to come. But I think the netbook’s lasting impact will be a shift in the way we think about price and portability for all mobile computers.

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14 replies on “Netbook sales may be leveling off — does it matter?”

  1. >I love how the industry likes to trumpet the death of the netbook. The fact is, they want it to die. They would rather charge you for a 1000 dollar laptop. More messed up data from the laptop industry.

    This machine is also from the laptop industry:

    It is a laptop with a full sized keyboard, aluminum body, 13.3″ WLED display, and one can get it with Ubuntu preloaded, for $449.

    A lightweight laptop pre-loaded with a fully functionally-complete software suite (no more to pay).

  2. I love how the industry likes to trumpet the death of the netbook. The fact is, they want it to die. They would rather charge you for a 1000 dollar laptop. More messed up data from the laptop industry.

  3. Some great points made here. Let’s used basic intelligence with this story. Sales have leveled off. Surprise? An indicator of what? Well think logically. New genre, first time buyers have bought. How could there be anything other than a leveling off of sales? The main thrust have purchased so once some of the first time buyers look at a new netbook how could the sales show anything different. In other words, this story is much ado about nothing. It is economics nothing more nothing less. To say the iPad or tablet market has or is going to cause a decline in netbook sales is a massive stretch. Massive. There is no proof out there, other than hype, that people are in love with tablets.

    We can babble endlessly about what is or isn’t a netbook, but I think we all know what they are. When a restaurant opens it’s doors, there is a rush. Huge sales in short amount of time. Then slows down, then comes the supper rush. Saying a restaurant is in trouble because sales peaked then declined is simply rubbish. Don’t get caught up in misleading statements or stats.

  4. The netbooks have proved is that price is an important faction in mobile computing space.

    Netbooks will stay and the other devices will be a compliment not a substitute for netbooks.

    If price is reduced then something has to be given as a trade and here will be a trade off.. So I think the defination for Netbooks should be changed and the new meaning should state that : A device which is cheap and has mobility should be termed as a Netbook.

    Laptop : Device that is not cheap and has larger screens more than 14 inch.

    Smartphones : Mobile device for receiving calls and have a screen size smaller than 3-4 inchs.

  5. I am of the opinion that netbooks are a niche product. It really is squeezed between the mobility of a smartphone and your laptop (desktops are great if you don’t have need for mobility, but are now a niche product too).

    So yeah if you really need to take notes and can’t be bothered to pack your laptop, get a netbook. odds are though, a $400 laptop would make you worlds happier if you need both a computer and something slightly mobile.

    Niche isn’t bad, netbooks are fantastic for airplanes, taking notes in class or meetings, But I really want a larger screen for word processing, web browsing, multitasking, watching movies and that is just off the top of my head.

  6. Atom processors are shipping less because they are using more powerful processors in the place of them celeron, CULV, etc. So just because the sale and shipping of Atom processors was down doesn’t necessarily mean that Netbooks sales are leveling off. Besides even Bill Gates likes netbook and dismissed the iPad as “just okay” because to be honest nothing can replace or take the place of netbooks, As consumers get smarter and realize they do not need a $2000 laptop or Macbook to surf the web and send emails. I believe netbooks will actually grow and become more powerful not to surpass but to compliment the laptop market.

  7. Mike I’m not sure the price barrier is shattered forever, but I think the concept of the sub $500 is market reality for the next few years. Sadly, I think the concept of the sub-$200 netbook is going to be lost very soon. And, I see that as the real loss. I think there really needed to be a 10″ — 1 GB — 160 HDD until running the most modern OS (Apple, Win, Linux) for $200. AN the market place was almost there but some really rotten dirty tricks by the computer industry not wanting to go that low (even though they could) stopped that from becoming a reality.
    Just and aside:
    I think a sub $200 basic netbook could have been an excellent thing for school children, for the working low-income families, and for anyone who just needed a second or third computer in the house. It is somewhat dangerous to talk about the “Digital Divide” because it is a complex issue when you start talking about today’s reality of information technology and information infrastructure. But one thing remains true the working poor can’t afford an iPhone or an iPad and even most netbooks at $350 are somewhat out of reach. On the other hand I cannot even imagine living my “middle-class” life without access to my own computer?

    How would I buy clothing?
    How would I renew my Drivers License?
    How would I pay my taxes?
    How would I find the route to a place I had to go?
    How do I communicate with family & friends?

    Sure there are analog or payer ways to do these things, but the phone company doesn’t send me a phone book any more, I don’t have a current road atlas in my house, I don’t have a ‘black book’ of important addresses and phone numbers of family and friends. If I don’t have access to my computer I would have to shell out money and make a lot of time to re-create my offline life again. And then my whole life flips back 25 years. That’s the digital divide in a nutshell. Imagine not living a week without a computer…imagine living the next five years. There really needed to be computers for people who still count afford one. There really needed to be a government program to provide people with free Wi-Fi nationwide. What we have lost as the computer companies have edged up prices again is the ability to put computers into everyone’s hands…that’s is very sad.

    1. Relax MonkeyKing! You´re being a bit emotional! The prices are actually still dropping! You can get an 8-hour battery netbook for $299 which is probably 30 percent or so better than last year.

      As for the prices going up — I just don´t see it! Apple is a poor example as the well-to-do farts who overpay for their products will always be the backbone of prices dropping in the bottom strata (a strata which, by the way, is steadfast reaching 007 proportions if the affordable hardware is used to the max). The prices of RAM, hard drives, SSD, etc. etc. also continue to drop fast and, in my opinion, are far more of an indicator of computing prices than the latest bullsh it netbook model.

      Also, netbooks can be had now for less than $260 (which would have costed more last year as well). Give the newer ARM processors a little more time to take hold as well in the netbook and tablet arena. The $100 laptops are still coming and, in fact, are already here in some forms! Give it time!

      Good news is still coming…. as soon as E-Ink, hard drives, SSD, etc. reach a new low in price… it will be possible to do many things with technology immediately (with a massive amount of resources becoming available immediately from the buidling past years, etc.) and for a ridiculously low price.

      Also, don´t be too quick to underestimate the ability of a low-income family to waste far more than $300 per month on junk (cigarettes, beer, credit loans, drugs, gambling, laziness, poor purchase decisions, convenience goods (such as paying $1.50 for a can of pop when 2 liters of soda can be had for .75 cents).

      When the extreme poor finally get a complete and unyielding hold on capable technology they will basically leapfrog straight to the most modern gadgets on the market (and the misfortuned may even find it strange that your Grandmother lives in a developed country and still uses a rotary dial phone).

    2. Maybe you’ll be doing all those things on your USD 120 tablet? https://bit.ly/ar7I6k

      Low cost ARM based tablets might fill the cheapo end of the computing space where the netbooks dared tread and then retreated.

  8. I would essentially agree Brad. I think the price barrier has been forever shattered. Even if people think that ‘Netbooks are Toys’, or whatever other mechanism they used to dismiss them, the real effect has been to place a very strong downward pressure on prices for laptops overall, especially the most portable and longest lasting computers which used to sell for a very high premium.

    The effects are going to be felt for a long, long time. Intel or AMD can’t just release another processor class and magically the laptop market will recover it’s margin. That’s just not going to happen. Consumers have seen that they can get ‘good enough’ performance at bargain basement prices, or step up to a truly useful class of machine for just a bit more… And that’s going to be the lasting effect of netbooks, whatever happens to the product class, especially since I think manufacturers have finally awoken to this fact, and realizing that there really ISN’T a magical floor where they can continue to compete on cost and maintain any margin at all, they’re trying to compete by adding more features in a hope to bring the price up. That said,t he bell has been rung, and public perception has already been modified…

    This next year or two is going to be very interesting. I think that the companies that ran to netbooks to get a slice of the action, will slowly pull back… we’re already seeing that to some extent. What is going to be interesting is Smartbooks.

    If Smartbooks (And tablets for that matter, but I’m largely ignoring them in this rant since they are almost a different computing class in my mind) can come out, and they can slot into that magic 200-250 dollar price mark (upper end of the impulse purchase range for most consumers these days), they will sell, even if it’s just for curiosities sake or for a computer for the kids. They won’t have Windows support, and in fact CAN NOT have it unless MS comes out with a new version of the OS optimized for ARM, and long term that’s VERY bad for Microsoft. If a significant set of users become familiar with Linux because of those devices, and Linux distro’s can make the experience roughly equivalent to that provided by Windows (and there really is no reason to assume they couldn’t if the users are actually there), then MS might see the first serious erosion in it’s market share in a long long time, and that would throw HUGE shock waves through the tech industry as a whole (at least in the short term), which will be both good and bad for it. It’s definitely something I’m interested in seeing play out.

    It’ll be fun to see if Entropy and Market Pressure (smartbooks, netbooks, low cost alternative computing) can overcome the Perseverance of the Norm (traditional computer models and sales practices). I’m just glad that the market that existed with high premiums for useful and portable computers that we saw dominate for so long, seems to be on the retreat, possibly to the point of extinction.

  9. I agree that the definition of a netbook is evolving. I bought an Acer 1410, 11.6 inches a little over 3lbs and Windows 7 Home Premium for $370 because of the exact same reasons one would buy a netbook, inexpensive, light, and thus mobile. To me that’s the definition of a netbook. Limiting the definition to a 10 inch screen and an Atom processor is stultifying, hardware and ideas change too fast.
    I think the squirming by many is the fact that light has always equaled very high profit margins and in a surprisingly short period that well established model has been demolished. All the reports of the decline of the netbook is really just industry putting they’re fingers in their ears and yelling no no no.
    It must be making some marketers lives hell that Apple is about to start selling the 3G Ipad for $625. I can’t wait for the knockoffs.

    1. A niche at 20-25% of the market is a very big niche (yes it is shrinking). The only bigger “niche” in the laptop world has to be the standard 13-18″ traditional brick, and it is losing ground. People buy them to surf the web and run Office mostly so why would they need the disadvantages of a brick laptop? Yeah they are attracted by the specs, but more and more people go for the hybrids that followed the netbook: dual core processors that are downclocked versions of the bricks’ processors with weight and battery life that is straight from the netbook world.

      Many still don’t see the point of battery life and portability AND Intel is doing all it can to weaken the competition to their very profitable full-size laptops parts (see Core iX CULV delays), but all my friends have been looking at me and others’ netbooks in the last 18 months and when the time comes to replace their brick, they are all ready to replace it with something lighter and with great battery life. Mind you, we are students and lug them to uni and use them in class for long hours, so some who leave their laptop on the desk might not get the point.

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