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Netbook Market 40% Down - Microsoft

By - Source: Tom's Hardware US | B 31 comments

Are netbooks slowly fading away? Microsoft mentioned during its quarterly earnings call that the overall PC market contracted by about 8% in the first quarter of year, which was at least in part driven by a massive 40% decline in netbook sales.

We are not really the pessimistic type of writers here, but 40% is a pretty substantial drop. Analysts picked up that number quickly and pointed to Intel and AMD, which did not paint a similar scenario, even if the overall average selling prices (ASP) increased and a drop of netbook processor sales was apparent. Microsoft indirectly accused Intel of cheating with its charts as the company apparently removed netbook CPU sales from its ASP charts entirely and took those products out of the equation.

We have been wondering for a while whether the tablet market is complementary, whether it has the potential to kill the netbook or whether it is a phenomenon that is limited to Apple as the PC industry has yet to produce a sucessful tablet. However, if the tablet kills the netbook in the end, it would somewhat dramatic for Intel, as the netbook was really the only successful product category the company created in recent history.

Remember the UMPC? Dead. The MID? Yup, dead as well. The netbook? It's still breathing, but it needs new ideas.

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  • 2 Hide
    proton9 , May 3, 2011 5:01 AM
    tablets are a fad.
  • 0 Hide
    kinggraves , May 3, 2011 5:20 AM
    Smartphones took a share of netbooks before tablets were even becoming interesting. If you can browse the web and check your mail on your phone, there's no need to use a netbook for those basic functions. Tablets took another share on their own because they work well for basic media and ebooks. Netbooks do however have some advantages like upgradability, a real OS, and a keyboard that simple OS tablets can't compete with. There is a place for all these devices because the customer's needs differ.

    The market is changing though when it comes to portable devices. We're seeing a lot of "hybrids" between tablets and netbooks. If they can find the right mix to make a product that fits everyone's needs, that hybrid device could put netbooks AND tablets out of business. Netbooks themselves seem to be at the limit of their abilities as well. Fusion was supposed to be the game changer for netbooks, but if you look at the devices using the E-350, it's pretty much either cheap, full size, lowend notebooks or expensive, high end (by netbook standards) netbooks. The original point of netbooks was to be affordable, otherwise they're just the "ultraportables" of old that never sold. You still have to go Atom if you want a cheap netbook (even though you can get an HP DM1Z rather cheap if you play HP just right). So I think the traditional netbook might be going out of fashion, returning to it's ultraportable roots.
  • 1 Hide
    alidan , May 3, 2011 5:32 AM
    netbooks and tablets will share market for a while.

    if i want a mobile computer for typing and crap, ill get a netbook.
    if i want a mobile thing for internet, id go a tablet

    but if i want anything else. ill build a pc.

    untill a tablet incorperates a real keyboard and not an on screen pos, and a stand that is built in, there will always be a netbook market.

    at least... until laptops as in 15inch" get really cheap, like 500$ and 1080p capable.
  • -1 Hide
    TheWhiteRose000 , May 3, 2011 5:37 AM
    sell a good one for 100 and I'll buy it.
    xD
  • 1 Hide
    proton9 , May 3, 2011 6:04 AM
    any sane person wont spend $600 on a tablet
  • 0 Hide
    damianrobertjones , May 3, 2011 7:50 AM
    alidan... untill a tablet incorperates a real keyboard and not an on screen pos, and a stand that is built in, there will always be a netbook market.


    Acer 1820ptz along with another three from memory
  • 0 Hide
    virtualban , May 3, 2011 7:57 AM
    proton9any sane person wont spend $600 on a tablet

    There are a lot of things a sane person won't do. It all comes down to the definition of sane.
    Even if I would not get a tablet, I can understand people getting one and willing to part from $600 to get it. Demand and supply will regulate the price. In any circumstance there will be people with unfulfilled desires, but IMO it's better to have a society when such unfulfilled desire is from not affording it while there, than because there are too few demands to justify a tablet being produced at all. If someone wishes for a tablet, they can work and be rewarded $ for being a productive member of society, and then go get the tablet of their desire. It is very functional and sane as I see it.
  • 1 Hide
    dimar , May 3, 2011 9:36 AM
    Netbooks never got a good start. The specs were always on the lowest side.
  • -1 Hide
    molo9000 , May 3, 2011 12:12 PM
    proton9tablets are a fad.


    A lot of laptops and desktops are going to be replaced once we can make 12-13" tablets light enough to be handheld.
  • 0 Hide
    beachbod , May 3, 2011 12:53 PM
    Intel cheating? Whats new.
  • 2 Hide
    greliu , May 3, 2011 12:56 PM
    Tablets aren't a fad, plan and simple. Although, I don't care for them, many users who only want to check emails and watch a quick news video are going to jump onto tablets. Desktops aren't going to be replaced for individuals that are gamers, programers, and others that require fast and powerful pc's. But, there are a lot more users that JUST check emails.
  • 1 Hide
    kartu , May 3, 2011 1:21 PM
    EeePad seems the way to go. Idea is simple and brilliant: you want to use your netbook somtimes like notebook (with keyboard) and sometimes as tablet.

    I wonder what has happened to notebook sales, didn't low budget notebooks sales increase?
  • 1 Hide
    mchuf , May 3, 2011 1:56 PM
    kinggravesSmartphones took a share of netbooks before tablets were even becoming interesting. If you can browse the web and check your mail on your phone, there's no need to use a netbook for those basic functions. Tablets took another share on their own because they work well for basic media and ebooks. Netbooks do however have some advantages like upgradability, a real OS, and a keyboard that simple OS tablets can't compete with. There is a place for all these devices because the customer's needs differ.The market is changing though when it comes to portable devices. We're seeing a lot of "hybrids" between tablets and netbooks. If they can find the right mix to make a product that fits everyone's needs, that hybrid device could put netbooks AND tablets out of business. Netbooks themselves seem to be at the limit of their abilities as well. Fusion was supposed to be the game changer for netbooks, but if you look at the devices using the E-350, it's pretty much either cheap, full size, lowend notebooks or expensive, high end (by netbook standards) netbooks. The original point of netbooks was to be affordable, otherwise they're just the "ultraportables" of old that never sold. You still have to go Atom if you want a cheap netbook (even though you can get an HP DM1Z rather cheap if you play HP just right). So I think the traditional netbook might be going out of fashion, returning to it's ultraportable roots.



    All of these devices have their own niches, but they also have their own problems.

    Smart phones are probably the best if you want a portable device. the trouble with them is you have to have a cell phone plan to use them even if you want to use WiFi. And worse yet, you often have to pay extra to use the phones WiFi function.

    Tablets are like smart phones, but don't have phone cabilities. And for me, touch screens just get plain nasty. Also they're so damn expensive for a machine with such limited functions. Although you don't have to pay anyone to use WiFi.

    Netbooks are for me the best option, but once again the prices are questionable. For the price of a top end netbook, you can get a low-priced notebook with more ram, a disc drive and a real os and not the dumbed down version of that os. Of course they are more portable than a notebook, but not as portable as a smart phone or tablet.

    What we really need is a smart phone sized WiFi netbook. Makeit a bit larger than a smart phone with a keyboard that folds over a touchscreen. The touchscreen replaces the touchpad functions.

  • 1 Hide
    fayzaan , May 3, 2011 3:13 PM
    alidannetbooks and tablets will share market for a while.if i want a mobile computer for typing and crap, ill get a netbook.if i want a mobile thing for internet, id go a tabletbut if i want anything else. ill build a pc. untill a tablet incorperates a real keyboard and not an on screen pos, and a stand that is built in, there will always be a netbook market. at least... until laptops as in 15inch" get really cheap, like 500$ and 1080p capable.


    There are already laptops in $400-$500 range that can do 1080p no problem. I bought one from bestbuy recently for like $349! lol
  • 1 Hide
    clonazepam , May 3, 2011 3:35 PM
    Personally, I don't like carrying anything around larger than a standard wallet. If I can't fit it into my pocket, its staying home. Right now I use a standard cell phone. I've had to use the internet on it a few times while on the go, and it did its job very slowly and painfully, but it worked.

    I suppose then for myself, I'd never upgrade beyond a reasonably sized smart phone though presently i dont have a need for one. I also don't want to pay for a monthly data plan if Im going to find the few offline apps i like and need for it.

    I've played around with netbooks and there again, they are painfully slow. So here's something more expensive than a cell phone or smart phone and it is bigger yet still is dreadfully slow. Due to its large increase in cost and size, without a significant boost in performance, its a tough sell.

    I've never used a tablet so I can't say much other than again the size and added cost turns me off. If I had a need for tablet type features, I'd rather go for a laptop that has a swivel or flip screen that converts it into a tablet b/c atleast then its got better performance, upgradeable memory, and additional customization to suit my needs.

    If you wanna carry around a big piece of hardware, might as well go all out and buy the laptop with tablet features. Take your cell phone out of your pocket and connect it as a modem to your laptop or have a mobile card for it.
  • 1 Hide
    Anomalyx , May 3, 2011 3:36 PM
    I agree with everyone who dislikes tablets. I think they're a hybrid that just kinda got thrown in there, and it doesn't fill any need in my life. I have a laptop, and I have a phone... why do I need a phone the size of a small laptop that can't make calls?
    They may be "fun" for other people, but they're useless to me (i.e. people who don't have piles of cash to burn, and actually buy things according to their value). Just like Apple products. Burn. =)
  • 1 Hide
    Anonymous , May 3, 2011 4:40 PM
    Netbooks and tablets both suck, it's going to eventually redux down to just smartphones and laptops for 90% of people. Smartphones for true mobility, laptops for real work. Smartphones that dock into laptops could become the new mainstream PC, where laptops have enough enough muscle for most people. Those who do hardcore gaming, or rendering work will still use a desktop.

    PS: The "netbook" market may be down, because AMD Brazos is superior to Atom, however, most of the products containing Brazos are ~12 inch laptops, not netbooks(AMD doesn't force OEMs to screen size limitations like Intel does, the ~10 form factor just sucks). If you redefine netbook to be anything with Atom or Brazos, with a keyboard and screen attached, the market may not be down at all.
  • 1 Hide
    NightLight , May 3, 2011 4:41 PM
    I think the star trek: TNG people should sue apple for copying the pad :p 
  • 2 Hide
    b23h , May 3, 2011 5:50 PM
    mmm.... just bought a netbook a few days ago. It very much serves a niche purpose for me. I bought it and loaded National Geographic Topo maps on it so that I could take it camping and pull up topo's from CA and NV on a larger screen than just a GPS screen.

    Advantages over a tablet:
    1. Runs Windows 7 (so that I can install the Topo maps).
    2. MATTE SCREEN (given I want to use it outside this was a critical factor).
    3. Cheap. Less than $300.00

  • 1 Hide
    pita , May 3, 2011 5:51 PM
    To me Netbook is just a transitional product, proving the point that price and mobility are the key, when most people do not perform many (serious) tasks on their mobile devices.

    Back then we only had ultra portable with ridiculous price that puts people off, while cheaper laptops are bulky and inconvenient.

    There is nothing bad about Netbook phasing out completely, it made a significant point in the history of mobile computing evolution and lived a good life while it lasted.
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