Ever since the EEE PC was launched way back in October 2007, the concept of the Ultra-Mobile Personal Computer (UMPCs) was turned on its head. Previously, UMPCs could hardly be called affordable, and having one usually invites more comments about your wallet rather than demanding needs. Ultra-mobile computing, mark II was hardly revolutionary in the technological sense. However, the way it seemingly addresses (or looks to be) the needs of a generation, was.
It’s not even a year since the first netbook arrived on the scene, and yet, the market has now developed to the point where you have a full range of netbooks at different price points. Ranging from as low as SGD398 (at one point) to SGD1,199 and all points in between; it feels as though the netbook is a mature product.
With such a sudden and unexpected burst of growth, it wouldn’t seem strange to think that somehow, its growth has hurt the sales of conventional notebooks.
Market Figures & Growth Potential
The figures that have been projected for netbooks have been nothing short of extraordinary – little wonder then, that almost everyone is making some sort of entry into this market. From Gigabyte to the latest entrants Lenovo, there is no question that there is room for growth and it can not be ignored.
Reports from various market intelligence agencies have been immensely positive: Gartner reports that 2008 alone will see netbook shipments in the region of 5.2-8.3 million units worldwide. Taiwanese research company, Market intelligence Center’s own research reports a similar figure (and then some), stating that global shipments is likely to reach 8.02 million this year, and likely to more than double, even possibly hitting 18.3 million in 2009.
IDC’s forecasts show worldwide shipments growing from just 430,000 units in 2007 to 9.2 million in 2012, of which, 45,000 units were sold in the United States in 2007, and look set to hit 2 million in 2012.
Regardless of the differences in projections, the message was loud and clear: the demand and the potential of the netbook cannot be ignored. Both Lenovo and Acer acknowledged this as much, citing the secondary mobile PC in Singapore as an area in which there is plenty of potential. Chia Shi Li, a Senior Product Specialist representing Acer, says that the “netbook is (well) positioned as a second notebook in a mature market like Singapore.”
The Secondary Notebook
We may not realise it, but we have reached a stage where it is not uncommon to have a secondary notebook. This would be analogous to the notebook a couple of years back; it complements your desktop, and handled the tasks that needed to be done on the move. It was never likely to replace your desktop, being that in terms of processing power, the notebook was significantly weaker, and that there are tasks that needed the utilization of a full-featured computer.
Plus ca change, plus c’est la meme chose, as the French always say, and undeniably, there is currently a demand for affordable notebooks that are mobile, and are able to perform the basic functionalities, such as web surfing (hence the term netbook), e-mail, music, and some basic Microsoft office applications such as Word, Excel, and PowerPoint.
And yet it might not have happened: until one day, ASUS Chairman Jonney Shih and CEO Jerry Shen noted that (possibly taking a cue from the OLPC project?) there was a lack of device in the market at the time, that could provide convenient and quick connections to the Internet; be powerful enough for everyday use, and yet be small and portable enough to be carried around everywhere.
This was the market the original UMPCs were supposed to have covered (although more of a business setting), but with little success, primarily because of cost. You can call it providence, or perhaps ingenuity, but the first netbook was thus ‘born’. Designed to be easy to use, and with just the bare essentials, the netbook was extremely portable, and became an instant hit. Perhaps the timing was perfect: the unrelenting development of CPUs and chipsets in recent years driving prices down, and the boom of the digital lifestyle, which, is never complete without generous access to the Internet.
Whatever the reason or cause, it soon became apparent that a new market segment had opened up.
Ready or Not Here We Come
Perennial heavyweights Lenovo is the latest of the big corporations to jump into the fray. “We are entering the market with netbooks that meet the needs of customers looking for a secondary mobile PC”, says Mr. Philip Tan, Country Manager for Consumer Business, Lenovo Singapore. And they are not alone – HP was one of the earliest of the big guns to leap into the market with the Mini-Note. “We believe that the HP Mini-Note will do well in both mature and emerging markets. For example, in mature markets like Japan, Korea, Taiwan, and Australia, the interest in this particular form factor has been high. HP has also experienced similar interest in emerging markets based on carry-weight and price,” said Serena Yong, General Manager, Personal Systems Group, HP Singapore.
With demand patterns as they are, it seems that the consumers have made their say on what makes a good mobile Internet tool and interestingly enough, the demand comes from a diverse group of people, ranging from busy executives to students, to even members of the household. For Asus, they have even managed to reach out to the enthusiast (the DlY-ers) market, and expanded their original sales scope. As a result, we can see an equally diverse range of netbooks, ranging from the trendy and chic offerings from Asus, Acer, Lenovo, MSI, just to name a few, to the sophisticated or business-like offerings from Gigabyte and HP.
But no matter what shape or form they took, the new-fangled devices were all devised with the same principles in mind – a full mobile Internet and (limited) productivity experience, at an affordable price point. In this area, all parties consulted were unanimous in their answers.
My personal opinion thus far is that publicity for the netbooks has been fairly low key as far as driving public interest and awareness is concerned. However, at least two of the traditional big names, namely HP and Acer, have maintained that they will continue publicity efforts to drive across the message of the netbook as a “mobile Internet companion” and as an “affordable mobile solution for the mass market”. HP in particular, believed strongly in its potential and subsequently paid a lot of attention to the Singapore launch of the Mini-Note.
Why Pay More?
It was inevitable that this question would come: With the netbook being able to perform many of the tasks we would normally get a notebook for, then why on earth should we pay more? Perhaps I’m alone when I feel that to some extent netbooks will ultimately take away some market share from the conventional notebooks, yet manufacturers don’t seem overly worried, and nor are they taking visible action in this area. Asus, Acer, HP, and Lenovo believe that netbooks were not intended as replacements for notebooks, and will serve their purpose as secondary devices performing basic functions. Differentiation was what some of the makers mentioned would be done to satisfy consumer demands. While not really addressing the question about whether the netbook has actually hurt notebook sales (only Acer stated for the record that there was no such issue), it does go to show that with the integration of the netbook to their existing notebook lines, differentiation becomes a critical element in their marketing strategy. For makers such as HP and Acer, they see the netbook as an ideal addition to their lineup in a category of its own. Asus, however, feels that there is no need to change their current strategy and that there isn’t much ‘close impact’ between notebooks and netbooks. In fact, Asus has the distinction of possibly having the most diverse range of netbooks, in the sense that they release new models frequently to effectively refresh their lineup; at one point they even had a variety of models ranging from as low as SGD398 up to SGD888. The news on the grapevine is that there are more to come, including a ‘luxury’ model called (for now at least) the S101.
Help! I’m Paying More & More!
The most expensive netbook you can find right now (in Singapore at least) is the HP Mini-Note which retails at SGD1,199 for their high-end model. For that price, it is possible to purchase a low-end notebook; although it must be said that the Mini-Note comes bundled with Windows Vista, and clearly a tidy sum pays for the exterior. At between SGD859 to SGD888, you will be able to pick up an MSI Wind or the Asus EEE 1 OOOH which feature the latest Atom processors. Even at those prices, you’re treading near the notebook territory. While it is true that it is hardly fair and incorrect to compare the two, but when the prices are this close, it will play on your mind one way or another. HP and Lenovo both declined to comment, but Acer suggested that SGD899 could pretty much be the feasible ceiling as far as the netbook market in Singapore is concerned. The EEE PC Business Group from Asus thought differently: “It is hard to say the maximum price range for netbook. However, we think it might depend on how consumers perceive (value). For example, some users want to buy an Eee PC with luxury and fashionable designs, and they think they can pay premium for style. On average, SGD599-SGD699 is the maximum price range. Of course, the price range will be highly correlated with sales volume.”
As it stands, the entry of relatively new players such as Lenovo or Dell should introduce some form of check and balance to market prices. If the market intelligence figures turn out as they should, prices of netbooks should not increase substantially (and if we’re lucky they might fall, though unlikely by much). in 2008 alone, there was much speculation on the reasons for the relatively high prices: shortage of battery cells, initial shortage of Atom processors (the de facto processor of choice), demand far outweighing production capabilities, just to name a few. With these seemingly out of the way, how will things change? Asus revealed that sales figures for 2008-2009 have the potential to go up because of improving conditions in chipset supply as well as ‘key parts’ supply. The inevitable price drop in key components, as well as a more competitive and diversified market segment will very likely lead to substantial growth and a more competitive product lineup.
Time For My Monthly Netbook Upgrade Again
The current Intel 945GSE and VIA CN896 chipsets are long overdue for an overhaul, and its no secret that the 945 effectively negates the low-power benefits that the Atom brings to netbooks. One can only wonder what the next generation of chipsets will bring? Current netbooks can barely play 720p HD videos; and not to mention drop frames are to be expected. I’m merely speculating here, but it is highly unlikely we can expect to see groundbreaking improvement in video performance in future chipsets, unless, of course it is the premium stuff. Any substantial improvement might lead to an actual cannibalization of notebook sales.
And so it seems that any immediate improvements will be confined to minor enhancements. Acer stated that it seeks to improve communication capabilities, while ASUS considers battery life and software development as important factors in their system design. Incidentally, HP has declined to comment on whether the Mini-Note lineup will be refreshed with the new VIA Nano processor.
Conclusion
In hypothetical situation where consumers embrace the netbook en masse, how would the industry react? Standard public relations answers aside, nobody will say much about this issue. Word out on the street swings from total disaster to a wet squib, and the fact of the matter is no one really knows beyond speculation. The speed at how the netbook has taken off has detracted us from the reality that in truth it is still early days. Furthermore, the hardware has not really matured, and we’re still in the early stages of adoption. This view was reflected by HP, who felt that whether the current popularity of ultra-compact, low-cost notebooks, will constitute a sea change in notebook-buying habits, still remains to be seen.
However, with companies adding the netbook to their line of consumer solutions, it is clear that the netbook is here to stay… for now. All that remains to be seen is whether or not it will change the face of mobile computing industry in ways we could not have imagined.
[Source from PC Magazine SIngapore September 2008]
Related Articles
pupuweb feed
Netbook : Impact and Implications
It’s not even a year since the first netbook arrived on the scene, and yet, the market has now developed to the point where you have a full range of netbooks at different price points. Ranging from as low as SGD398 (at one point) to SGD1,199 and all points in between; it feels as though the netbook is a mature product.
With such a sudden and unexpected burst of growth, it wouldn’t seem strange to think that somehow, its growth has hurt the sales of conventional notebooks.
Market Figures & Growth Potential
The figures that have been projected for netbooks have been nothing short of extraordinary – little wonder then, that almost everyone is making some sort of entry into this market. From Gigabyte to the latest entrants Lenovo, there is no question that there is room for growth and it can not be ignored.
Reports from various market intelligence agencies have been immensely positive: Gartner reports that 2008 alone will see netbook shipments in the region of 5.2-8.3 million units worldwide. Taiwanese research company, Market intelligence Center’s own research reports a similar figure (and then some), stating that global shipments is likely to reach 8.02 million this year, and likely to more than double, even possibly hitting 18.3 million in 2009.
IDC’s forecasts show worldwide shipments growing from just 430,000 units in 2007 to 9.2 million in 2012, of which, 45,000 units were sold in the United States in 2007, and look set to hit 2 million in 2012.
Regardless of the differences in projections, the message was loud and clear: the demand and the potential of the netbook cannot be ignored. Both Lenovo and Acer acknowledged this as much, citing the secondary mobile PC in Singapore as an area in which there is plenty of potential. Chia Shi Li, a Senior Product Specialist representing Acer, says that the “netbook is (well) positioned as a second notebook in a mature market like Singapore.”
The Secondary Notebook
We may not realise it, but we have reached a stage where it is not uncommon to have a secondary notebook. This would be analogous to the notebook a couple of years back; it complements your desktop, and handled the tasks that needed to be done on the move. It was never likely to replace your desktop, being that in terms of processing power, the notebook was significantly weaker, and that there are tasks that needed the utilization of a full-featured computer.
Plus ca change, plus c’est la meme chose, as the French always say, and undeniably, there is currently a demand for affordable notebooks that are mobile, and are able to perform the basic functionalities, such as web surfing (hence the term netbook), e-mail, music, and some basic Microsoft office applications such as Word, Excel, and PowerPoint.
And yet it might not have happened: until one day, ASUS Chairman Jonney Shih and CEO Jerry Shen noted that (possibly taking a cue from the OLPC project?) there was a lack of device in the market at the time, that could provide convenient and quick connections to the Internet; be powerful enough for everyday use, and yet be small and portable enough to be carried around everywhere.
This was the market the original UMPCs were supposed to have covered (although more of a business setting), but with little success, primarily because of cost. You can call it providence, or perhaps ingenuity, but the first netbook was thus ‘born’. Designed to be easy to use, and with just the bare essentials, the netbook was extremely portable, and became an instant hit. Perhaps the timing was perfect: the unrelenting development of CPUs and chipsets in recent years driving prices down, and the boom of the digital lifestyle, which, is never complete without generous access to the Internet.
Whatever the reason or cause, it soon became apparent that a new market segment had opened up.
Ready or Not Here We Come
Perennial heavyweights Lenovo is the latest of the big corporations to jump into the fray. “We are entering the market with netbooks that meet the needs of customers looking for a secondary mobile PC”, says Mr. Philip Tan, Country Manager for Consumer Business, Lenovo Singapore. And they are not alone – HP was one of the earliest of the big guns to leap into the market with the Mini-Note. “We believe that the HP Mini-Note will do well in both mature and emerging markets. For example, in mature markets like Japan, Korea, Taiwan, and Australia, the interest in this particular form factor has been high. HP has also experienced similar interest in emerging markets based on carry-weight and price,” said Serena Yong, General Manager, Personal Systems Group, HP Singapore.
With demand patterns as they are, it seems that the consumers have made their say on what makes a good mobile Internet tool and interestingly enough, the demand comes from a diverse group of people, ranging from busy executives to students, to even members of the household. For Asus, they have even managed to reach out to the enthusiast (the DlY-ers) market, and expanded their original sales scope. As a result, we can see an equally diverse range of netbooks, ranging from the trendy and chic offerings from Asus, Acer, Lenovo, MSI, just to name a few, to the sophisticated or business-like offerings from Gigabyte and HP.
But no matter what shape or form they took, the new-fangled devices were all devised with the same principles in mind – a full mobile Internet and (limited) productivity experience, at an affordable price point. In this area, all parties consulted were unanimous in their answers.
My personal opinion thus far is that publicity for the netbooks has been fairly low key as far as driving public interest and awareness is concerned. However, at least two of the traditional big names, namely HP and Acer, have maintained that they will continue publicity efforts to drive across the message of the netbook as a “mobile Internet companion” and as an “affordable mobile solution for the mass market”. HP in particular, believed strongly in its potential and subsequently paid a lot of attention to the Singapore launch of the Mini-Note.
Why Pay More?
It was inevitable that this question would come: With the netbook being able to perform many of the tasks we would normally get a notebook for, then why on earth should we pay more? Perhaps I’m alone when I feel that to some extent netbooks will ultimately take away some market share from the conventional notebooks, yet manufacturers don’t seem overly worried, and nor are they taking visible action in this area. Asus, Acer, HP, and Lenovo believe that netbooks were not intended as replacements for notebooks, and will serve their purpose as secondary devices performing basic functions. Differentiation was what some of the makers mentioned would be done to satisfy consumer demands. While not really addressing the question about whether the netbook has actually hurt notebook sales (only Acer stated for the record that there was no such issue), it does go to show that with the integration of the netbook to their existing notebook lines, differentiation becomes a critical element in their marketing strategy. For makers such as HP and Acer, they see the netbook as an ideal addition to their lineup in a category of its own. Asus, however, feels that there is no need to change their current strategy and that there isn’t much ‘close impact’ between notebooks and netbooks. In fact, Asus has the distinction of possibly having the most diverse range of netbooks, in the sense that they release new models frequently to effectively refresh their lineup; at one point they even had a variety of models ranging from as low as SGD398 up to SGD888. The news on the grapevine is that there are more to come, including a ‘luxury’ model called (for now at least) the S101.
Help! I’m Paying More & More!
The most expensive netbook you can find right now (in Singapore at least) is the HP Mini-Note which retails at SGD1,199 for their high-end model. For that price, it is possible to purchase a low-end notebook; although it must be said that the Mini-Note comes bundled with Windows Vista, and clearly a tidy sum pays for the exterior. At between SGD859 to SGD888, you will be able to pick up an MSI Wind or the Asus EEE 1 OOOH which feature the latest Atom processors. Even at those prices, you’re treading near the notebook territory. While it is true that it is hardly fair and incorrect to compare the two, but when the prices are this close, it will play on your mind one way or another. HP and Lenovo both declined to comment, but Acer suggested that SGD899 could pretty much be the feasible ceiling as far as the netbook market in Singapore is concerned. The EEE PC Business Group from Asus thought differently: “It is hard to say the maximum price range for netbook. However, we think it might depend on how consumers perceive (value). For example, some users want to buy an Eee PC with luxury and fashionable designs, and they think they can pay premium for style. On average, SGD599-SGD699 is the maximum price range. Of course, the price range will be highly correlated with sales volume.”
As it stands, the entry of relatively new players such as Lenovo or Dell should introduce some form of check and balance to market prices. If the market intelligence figures turn out as they should, prices of netbooks should not increase substantially (and if we’re lucky they might fall, though unlikely by much). in 2008 alone, there was much speculation on the reasons for the relatively high prices: shortage of battery cells, initial shortage of Atom processors (the de facto processor of choice), demand far outweighing production capabilities, just to name a few. With these seemingly out of the way, how will things change? Asus revealed that sales figures for 2008-2009 have the potential to go up because of improving conditions in chipset supply as well as ‘key parts’ supply. The inevitable price drop in key components, as well as a more competitive and diversified market segment will very likely lead to substantial growth and a more competitive product lineup.
Time For My Monthly Netbook Upgrade Again
The current Intel 945GSE and VIA CN896 chipsets are long overdue for an overhaul, and its no secret that the 945 effectively negates the low-power benefits that the Atom brings to netbooks. One can only wonder what the next generation of chipsets will bring? Current netbooks can barely play 720p HD videos; and not to mention drop frames are to be expected. I’m merely speculating here, but it is highly unlikely we can expect to see groundbreaking improvement in video performance in future chipsets, unless, of course it is the premium stuff. Any substantial improvement might lead to an actual cannibalization of notebook sales.
And so it seems that any immediate improvements will be confined to minor enhancements. Acer stated that it seeks to improve communication capabilities, while ASUS considers battery life and software development as important factors in their system design. Incidentally, HP has declined to comment on whether the Mini-Note lineup will be refreshed with the new VIA Nano processor.
Conclusion
In hypothetical situation where consumers embrace the netbook en masse, how would the industry react? Standard public relations answers aside, nobody will say much about this issue. Word out on the street swings from total disaster to a wet squib, and the fact of the matter is no one really knows beyond speculation. The speed at how the netbook has taken off has detracted us from the reality that in truth it is still early days. Furthermore, the hardware has not really matured, and we’re still in the early stages of adoption. This view was reflected by HP, who felt that whether the current popularity of ultra-compact, low-cost notebooks, will constitute a sea change in notebook-buying habits, still remains to be seen.
However, with companies adding the netbook to their line of consumer solutions, it is clear that the netbook is here to stay… for now. All that remains to be seen is whether or not it will change the face of mobile computing industry in ways we could not have imagined.
[Source from PC Magazine SIngapore September 2008]
Related Articles