Netbook Shipments Likely to Soar 30%, Leading PC Industry Growth in 2010, Research Firm Says

Netbook

Taiwan’s Acer, ASUSTeK Lead Global Competition in Netbooks, According to U.S. Market Researcher iSuppli

Netbook shipments will increase by 30 percent this year, leading overall PC industry growth on strong consumer demand, according to U.S. market research firm iSuppli.

Taiwan’s Acer Inc., which last year overtook rivals to become the world’s No. 2 PC company, will probably keep its position as the No. 1 netbook supplier this year, iSuppli said in a report.

Netbook shipments will increase this year to 34.5 million units and nearly double to 58.3 million units by 2014, according to iSuppli, which defines a netbook as a notebook computer with a screen smaller than 10.2 inches that sells for about US$500. Taiwan companies made the world’s first netbooks about two years ago to help make computers affordable to a wider range of people.

“Despite the worldwide recession last year, consumers were enthusiastic about notebook PCs, a trend that will persist in 2010,” said Peter Lin, a senior analyst with iSuppli.

Competitive pricing, strong channel distribution and faster time to market, helped Acer ship 9.8 million netbooks to take a 37 percent share of the market in 2009, iSuppli said. Second-ranked ASUSTeK Computer Inc. of Taiwan had a 21 percent share of the netbook market with shipments of 5.5 million units last year, according to iSuppli.

Another type of notebook PC introduced last year called consumer ultra low voltage, or CULV notebooks, will increase by 93 percent to nearly 14.5 million units in 2010, according to iSuppli. CULV notebooks are larger than netbooks and sell for about US$800. Acer, was also the top supplier of CULV notebooks in 2009, shipping about 5 million units. ASUSTeK was No. 2, shipping about 700,000 units, iSuppli said.

As per industry sources, the PC market in India is set to witness a generational shift, notably to the mini notebook PC or ‘netbook’. With India fast becoming an upcoming consumer hub for diverse computing products, this segment presents one of the largest opportunities for all major brands. Netbooks in India account for about 12% of overall notebook sales and the number is expected to be 15% by Q4 2010. Industry experts estimate the total netbook sales in India to touch 0.4 million units (about Rs 840 crore or USD179 million) in 2010.

The two Taiwan based technology players, Acer and ASUS are looking at having greater presence in the Indian netbook market. Acer, which currently tops the netbook market globally, sees a tremendous potential in India having already shipped 50,000 netbooks in FY 10. Acer has introduced netbooks with OSs ranging from Windows 7 Starter, XP Home and Linux. The new models sporting the Intel PineTrail technology give greater efficiency and battery life. With sleek designs, higher battery life and a plethora of OS offerings, Acer believes that it has a compelling value proposition that is ideal for Web browsing, e-mail, social interactions and reliability.

The highly portable netbooks, owing to their cost competitive pricing and easy internet access facility, have witnessed growth drivers among the educational institutions and corporates apart from the ‘digital lifestyle’ oriented consumers in India. Most players expect netbooks to be positioned in India as a companion device for digital content consumption and for running an application or two. Priced around INR 20,000 for basic sets, this category has proliferated with variants featuring higher screen sizes and gesture sensitive touchpads, available at price bands stretching up to no more than INR 25,000.

The netbook draws from the one laptop per child (OLPC) initiative to make PCs affordable to a wider range of students around the world. The OLPC’s aim is to narrow the digital divide, defined as the gap between people with effective access to digital and information technology and those with very limited or no access at all.

Taiwan’s personal computer industry saw revenues soar by 53% in the first quarter this year, nearly doubling global sales growth as Taiwan’s PC makers boosted their share of the market.

Taiwan’s largest PC companies include Acer Inc., the world’s second-largest computer maker, as well as growing brands such as ASUS and MSI. Asustek Computer, which owns the ASUS brand, led the three companies’ sales growth with a 85% jump in revenues to NT$74.8 billion (US$2.4 billion) during the first quarter this year. ASUS became the fifth-largest global PC brand during the first quarter, according to U.S. market research firm Gartner.

Taiwan has won a reputation as one of the world’s leading producers of low-cost, high-quality electronic goods. Taiwanese companies make nearly three quarters of the world’s personal computers and about half of the world’s liquid crystal displays.

In recent years, more of these companies have emerged from contract manufacturing to build their own brands. Together, the branded companies and contract manufacturers form a very efficient production chain that responds quickly to market demand and provides excellent value to consumers.