Netbook Market 40% Down - Microsoft

By Douglas Perry
published

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.

Douglas Perry
31 Comments Comment from the forums
  • proton9
    tablets are a fad.
    Reply
  • kinggraves
    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.
    Reply
  • alidan
    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.
    Reply
  • TheWhiteRose000
    sell a good one for 100 and I'll buy it.
    xD
    Reply
  • proton9
    any sane person wont spend $600 on a tablet
    Reply
  • damianrobertjones
    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
    Reply
  • virtualban
    proton9any sane person wont spend $600 on a tabletThere 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.
    Reply
  • dimar
    Netbooks never got a good start. The specs were always on the lowest side.
    Reply
  • molo9000
    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.
    Reply
  • beachbod
    Intel cheating? Whats new.
    Reply