Netbooks soared in ’09 but face challenge from ultrathin laptops

Netbook shipments worldwide are expected to have jumped by 103 percent this year compared to last year, although the fast growth rate could slow down in 2010 as prices for portable PCs fall, research firm DisplaySearch said on Tuesday.

Global netbook shipments are expected to total 33.3 million units this year, more than double the 16.4 million netbooks that shipped last year. Netbook shipments could reach 39.7 million in 2010, a growth rate of 19 percent compared to 2009.

Netbooks are attractive because of the portability and low prices that make them affordable for first-time PCs for buyers, especially in emerging markets, said John Jacobs, director of notebook market research at DisplaySearch. Netbooks are also attractive to consumers as a secondary PC at home. The growing shipments were aided by wireless service providers that bundled subsidized netbooks with mobile broadband contracts, Jacobs said.

Netbooks are low-cost laptops characterized by screens between 7 and 10 inches. The devices are designed to surf the Web and run light applications like word processing or spreadsheets.

Netbooks are typically priced between $200 and $500, but shipments could be threatened by the emergence of ultrathin laptops priced under $500 with screens between 10 and 12 inches, Jacobs said. Ultrathin laptops are as portable as netbooks, but are capable of running applications like high-definition multimedia and casual gaming. Users have consistently complained about the poor multimedia capabilities of netbooks.

Intel has also recognized the threat of ultrathin laptops, saying last week that the category could cannibalize netbook shipments. However, the company also said that netbooks would continue to attract buyers who rely on the Web for most of their computing.

During the third quarter this year, Acer was the leading vendor of netbooks with 21.4 percent market share, but was losing ground to Hewlett-Packard, which held a 16 percent market share and was growing, Jacobs said. Asustek held the third spot at 14.8 percent market share and was losing share to Samsung, Dell and Lenovo, which were in third, fourth and fifth place, respectively.

Asus was the first out of the gate with netbooks in 2007, but it may continue to lose market share as it doesn't have the budget or marketing pull of large vendors like Hewlett-Packard or Samsung, Jacobs said.

Total portable PC shipments worldwide — including netbooks and laptops — are expected to reach 169.6 million units this year for 16 percent growth compared to last year. Portable PC shipments should grow by 17 percent in 2010, Jacobs said.