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Are netbooks dead? The prognosis is grim

Loyd Case | Feb. 22, 2012
Remember netbooks? Those inexpensive, highly portable, long-battery-life laptops made primarily for lightweight tasks like Web browsing? Netbook sales have declined. In the United States, sales have dropped precipitously since 2010, and the trend in the rest of the world is starting to follow.

Remember netbooks? Those inexpensive, highly portable, long-battery-life laptops made primarily for lightweight tasks like Web browsing? Netbook sales have declined. In the United States, sales have dropped precipitously since 2010, and the trend in the rest of the world is starting to follow.

When netbooks burst onto the scene in 2007, they seemed to be ideal for people looking for a lightweight, on-the-go computer. As the name suggests, netbooks were designed for Web browsing and online content consumption, as well as for light office work. Performance was limited, however, partly because the machines used the first Intel Atom CPUs and partly because the starter versions of Windows imposed crippling requirements. Microsoft’s licensing limited initial Windows netbooks to a scant 1GB of RAM. In addition, most early netbooks shipped with cramped keyboards, plus tiny, 7- to 10-inch, low-resolution screens.

Despite their limitations, netbooks filled a valuable niche when released. Inexpensive, lightweight, and fairly rugged, netbooks arrived just as the fast and reliable 802.11n Wi-Fi standard began to take off, and most were equipped to support it. Netbooks became the hot new category, and companies rushed to fill a niche pioneered by Asus’s original Eee PC, the first publicly announced netbook.

Netbook Sales Plummet

Today, netbooks have faded from the scene. Dell has stopped selling netbooks altogether. HP seems to be positioning its sole remaining model, the Mini 1104, for the education market. Although netbooks remain available at retail and online outlets, new models are few and far between. Asus, the original netbook maker, is still selling several netbook models.

Starting in early 2010, sales of netbooks “took a nosedive,” IDC analyst David Daoud notes. Netbook sales in the United States in particular fell off a cliff.

The numbers in the chart above represent unit sales in the United States, in millions (source: IDC). The message: Netbook sales have rapidly declined, and continue to drop in one of the world’s biggest PC markets.

Other parts of the world trailed the U.S. trend, however.

Netbook sales growth continued in most of the rest of the world through 2010, but began to tail off sharply in Western Europe by early 2011. Today, growth has all but halted in most areas, except for Latin America. Most of the growth has been in the developing world.

Put all of that data together, and you end up with worldwide netbook sales showing a gradual decline over the past two years, with the trend moving downward overall.

What is happening to netbooks is a classic case of technological innovation killing a product niche, particularly in the United States. When netbooks first launched, users noticed their sluggish performance, mediocre keyboards, and tiny screens. Some manufacturers built netbooks with larger screens, but the increased price and weight made higher-performing laptops seem a better deal.

 

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