Netbook Popularity Continues to Rise, But at What Price?

The popularity of the blessed curse of the PC industry, the netbooks, just keeps on rising. DisplaySearch has published it latest quarterly report on the state of the notebook market, and conclude that netbook popularity is rising, but at the cost of revenues.

The data gathered by DisplaySearch indicates that the popularity of netbooks is still rising rapidly. This time around, DisplaySearch focusses on the revenue developments in the notebook industry, and they found that the revenues in the netbook market are rising rapidly (37% q/q, 264% y/y), while the rest of the market is seeing a decline.

However, the average selling prices in the overall portable market are dropping fast, and especially netbooks seem to “suffer” from that trend. It is clear that customers want cheap netbooks, but this comes at a price for manufacturers: margins on netbooks are already thin, but with the average selling prices dropping even further this only gets worse. While the ASP of netbooks dropped 29% year-over-year, the unit growth of more than 360% year-over-year masks this somewhat.

“Mini-notes [netbooks in DisplaySearch-speak] have been a significant contributor to volume growth in the portable PC market as their very attractive price points make owning a secondary computer viable for many consumers. However, the lower ASPs of these devices are clearly having a negative impact on portable PC market revenue,” said John F. Jacobs, Director of Notebook Market Research at DisplaySearch, “For 2009, we expect continued ASP erosion across all portable computer categories, leading to the first Y/Y decline of portable computer revenue.”


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