Eee PC-like Notebooks Unlikely To Become Blockbusters, Says IDC

San Mateo (CA) - There is an undeniable excitement that surrounds so called ultra low-cost notebook PCs these days. The OLPC XO and the Asus Eee PC have created another product segment between smartphones and traditional notebooks that is not only aimed at developing countries but is finding many friends in saturated markets as well. But despite the initial enthusiasm, these notebooks will not become "blockbusters", but are likely to remain "secondary computing devices," IDC believes.

There is hardly one day on which we don’t hear anything about the Eee PC and these new developments are typically among the most read stories we have. While we are still trying to figure out if this interest is simply because of initial curiosity or long-term interest, Bob O’Donnell, vice president, clients and displays at IDC has already made up his mind. His conclusion: These notebooks are here to stay and will see a big jump in unit shipments, but they won’t become "blockbusters".

O’Donnell said that sub-$500 clamshell devices with 7-10" screens "offer most of the functionality that many typical users want", but he found that they "make the most sense as secondary computing devices, used primarily for online activities and carried around more often than "regular" notebook PCs." An exception could be the education market, in which these computers have an opportunity to become primary computers for school-age (K-8) children.

The analyst argues that devices such as the Eee PC simply are not as cheap as the category of ultra low-cost indicates. The price gap to fully blown notebooks may ultimately be too small to convince consumers to accept the downgrade in functionality for just a few dollars. PC vendors, on the other side, are challenged by small profit margins, which O’Donnell believes will result in an environment that promotes will promote ultra low-cost notebooks as "additive products" and not as replacement products.

Still, IDC believes that worldwide shipments of the ultra low cost notebook PC will grow from less than 500,000 units in 2007 to more than 9 million in 2012. Low average selling prices will keep global revenues down - below $3 billion in 2012. As a percentage of the total consumer PC market, these devices will remain under 5% throughout this forecast period. However, ultra low-cost notebooks could eventually capture more than one third of the education market by 2012, IDC said.

  • Luscious
    ULPC's have many other uses. I was recently attending a trade show where the onsite IT backbone used EEE laptops to run badge scanning terminals. When you consider that about 200 or more of these laptops were set up at the show, the size and cost considerations immediately jump to the forefront. Then you have the obvious logistical advantages of shipping smaller inventory and insurance savings for cheaper hardware.

    I expect to see more trade show IT support companies use these laptops in the future.
  • histud
    IDC is stating that the new netbooks will not be blockbusters, but also talk about how they are only going to be secondary PC's. I agree that they will only be secondary PC's to our desktops at home (or larger laptop), but I also think that they are going to be much bigger than expected. As far as I can see, they just recently only entered the market and the big retailers like Best Buy have only just begun sinking their teeth in. Right now the main users got theirs online, wait until they are as readily available at such a selection as the normal 15"-17" counterparts.