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In the second quarter of the year netbook shipments reached 38 million mark and accounted for 22.2% of all mobile personal computers (PCs) in Q2 2009, according to DisplaySearch. The strength of netbook market is generally a result of global recession of the economy, nevertheless, notebook market also continued to grow, which is a positive news, especially for large makers.

New Netbooks May Deter Buyers

Netbook market was particularly strong, growing 40% Q/Q, which was twice the impressive 22% quarter-on-quarter growth rate of larger notebook PCs. The strong growth of netbook drove their share of the portable computer markets to 22.2% in Q2 2009.

Asustek Computer, the pioneer in netbooks, has been steadily losing share because Tier 1 brands like Acer Group, Hewlett-Packard, Dell, Lenovo and Toshiba have become increasingly aggressive in this segment.

However, netbooks are not invulnerable: many manufacturers add larger screens and boost other specifications of their systems to improve their competitive position. This naturally increases their costs and make them compete against lower-end ultra-portable notebooks. As a result, many consumers may not buy under-performing netbooks, but decide to acquire fully-featured laptops.

“Netbook screen sizes have increased steadily, from 7.0" to 8.9” and then to 10.2". Some panel makers and brands are promoting 11.6" mini-note displays, leading to an overlap with ultraportable notebooks. However, the higher prices of these larger netbooks diminish their cost advantage. In addition to many other key players in the supply chain, Microsoft indicated it is their desire to increase the ASP of [netbooks]. A significant increase to the ASP of mini-notes may deter consumers that are predominantly using mini-notes as secondary PCs,” said John F. Jacobs, director of notebook market research at DisplaySearch.

Netbooks Most Popular in China, Latin America

Netbook penetration in Latin America and Greater China is higher than notebook PC penetration. The low prices of netbooks make these products more affordable for these emerging markets, and these regions have many first-time PC buyers, who are less likely to require all the bells and whistles available on a larger mainstream notebook PC.

In many regions, telecom providers have been offering subsidized netbooks for several quarters, which helped propel growth. In Western European countries, a number of telecoms are subsidizing 100% of the price of the netbook when the customer signs a two-year data plan contract.

In North America, telecom providers are aggressively marketing mini-notes with a two-year data plan contract, while some cable providers are offering heavily discounted netbooks as an incentive to sign a contract for cable TV, Internet and phone service. The incentives have been quite successful in Europe. In North America, these promotions were only test marketed in Q2 2009, so there is insufficient data to determine if they will achieve the same measure of success.

Netbooks have been a significant contributor to the growth in the portable PC market as their very attractive price points make owning a secondary computer viable for many consumers.

Tags: ASUS, Acer, HP, Dell, Lenovo, Toshiba, Intel

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