Are netbooks shrinking Apple's slice of the portable market?
With momentum in a dreary global economy now favoring mini-notebooks called netbooks, many top tier PC vendors are seeing various forms of success in the segment, which for the first time last quarter showed signs of straining Apple's share of the overall portable computing market.
A report released by DisplaySearch this week notes that netbooks have emerged as a bright spot in the otherwise dismal PC market, with sales rising some 160% during the third quarter of the year, with all of the major players except Apple now contributing their own offerings.
The latest wave of netbooks are different from those in years past, which were well equipped and typically fetched a premium over full-sized netbooks. Today, they're barebones systems that start at around $300. And they've been gaining popularity ever since PC vendor Asus opened the door to the market late last year with its Eee PC, an approach to portable computing that was quickly duplicated by many of its rival PC makers.
DisplaySearch expects the netbook market to surge from less than 1 million units in 2007 to over 14 million units by the end of this year. Going forward, the firm believes the segment is poised for even more dramatic growth, propelled by low prices and a user experience that much more closely mirrors a typical PC.
"With the lone exception of Apple, all of the top 10 PC brands have entered the mini-note PC market, initially as a response to the competitive threat posed by Asus, but also to satisfy demand from customers for low-priced, thin and very light (less than 3 pounds) products that provide at least a modicum of typical office software functionality and also enable greater mobility," said John F. Jacobs, Director of Notebook Market Research for DisplaySearch.
He added that "demand for greater mobility is especially evident in certain geographies as a number of mini-note PC brands are partnering with telecom providers to subsidize mini-note PCs, much like they do mobile phones."
More specifically, Jacobs is forecasting the netbook segment to settle at approximately 16% share of the notebook PC market by 2011, fueled by a combination of early adopters, consumer and enterprise customers seeking a smaller or secondary notebook PC, as well as new customers in emerging markets."
As part of his report, the researcher threw together a market share chart that combines netbook and traditional notebook sales by brand. It shows that, despite sales of Macs growing at more than 2.5 times the industry average, the lack of a netbook offering means the company's slice of the overall portable computing market has shrunk from 4.6% in the third quarter of 2007 to 4.1% in the third quarter of this year. In addition, each of the top PC vendors with the exception of Sony and Lenovo grew their combined portable shipments faster than Apple's 24%.
For his part, Apple chief executive Steve Jobs has made it clear that Apple isn't going after the budget PC market just yet. "We choose to be in some segments of the market and we choose not to be in certain segments of the market," he explained during a recent conference call.
"We're not tremendously worried," he said. "As we look at the netbook category, that's a nascent category. As best as we can tell, there's not a lot of them being sold."
Still, Jobs didn't shut the door on an Apple netbook completely, explaining that the company's plan is to observe the market for the time being and see how it evolves. "[A]nd we have got some pretty interesting ideas if it does evolve," he added.
In a lengthy report last week, Technology Business Research analyst Ezra Gottheil dismissed the notion of an artificial premium on Apple products, saying the Mac maker is bound to reach a breaking point where perceived quality can't override genuine financial woes from customers.
Gottheil predicts the company will release a computer in the netbook class within the first half of next year, but one that doesn't obey many of the rules dictated by the industry. He sees it fetching around $599.
A report released by DisplaySearch this week notes that netbooks have emerged as a bright spot in the otherwise dismal PC market, with sales rising some 160% during the third quarter of the year, with all of the major players except Apple now contributing their own offerings.
The latest wave of netbooks are different from those in years past, which were well equipped and typically fetched a premium over full-sized netbooks. Today, they're barebones systems that start at around $300. And they've been gaining popularity ever since PC vendor Asus opened the door to the market late last year with its Eee PC, an approach to portable computing that was quickly duplicated by many of its rival PC makers.
DisplaySearch expects the netbook market to surge from less than 1 million units in 2007 to over 14 million units by the end of this year. Going forward, the firm believes the segment is poised for even more dramatic growth, propelled by low prices and a user experience that much more closely mirrors a typical PC.
"With the lone exception of Apple, all of the top 10 PC brands have entered the mini-note PC market, initially as a response to the competitive threat posed by Asus, but also to satisfy demand from customers for low-priced, thin and very light (less than 3 pounds) products that provide at least a modicum of typical office software functionality and also enable greater mobility," said John F. Jacobs, Director of Notebook Market Research for DisplaySearch.
He added that "demand for greater mobility is especially evident in certain geographies as a number of mini-note PC brands are partnering with telecom providers to subsidize mini-note PCs, much like they do mobile phones."
More specifically, Jacobs is forecasting the netbook segment to settle at approximately 16% share of the notebook PC market by 2011, fueled by a combination of early adopters, consumer and enterprise customers seeking a smaller or secondary notebook PC, as well as new customers in emerging markets."
As part of his report, the researcher threw together a market share chart that combines netbook and traditional notebook sales by brand. It shows that, despite sales of Macs growing at more than 2.5 times the industry average, the lack of a netbook offering means the company's slice of the overall portable computing market has shrunk from 4.6% in the third quarter of 2007 to 4.1% in the third quarter of this year. In addition, each of the top PC vendors with the exception of Sony and Lenovo grew their combined portable shipments faster than Apple's 24%.
For his part, Apple chief executive Steve Jobs has made it clear that Apple isn't going after the budget PC market just yet. "We choose to be in some segments of the market and we choose not to be in certain segments of the market," he explained during a recent conference call.
"We're not tremendously worried," he said. "As we look at the netbook category, that's a nascent category. As best as we can tell, there's not a lot of them being sold."
Still, Jobs didn't shut the door on an Apple netbook completely, explaining that the company's plan is to observe the market for the time being and see how it evolves. "[A]nd we have got some pretty interesting ideas if it does evolve," he added.
In a lengthy report last week, Technology Business Research analyst Ezra Gottheil dismissed the notion of an artificial premium on Apple products, saying the Mac maker is bound to reach a breaking point where perceived quality can't override genuine financial woes from customers.
Gottheil predicts the company will release a computer in the netbook class within the first half of next year, but one that doesn't obey many of the rules dictated by the industry. He sees it fetching around $599.
Comments
Are netbooks shrinking Apple's slice of the portable market?
Is this a joke? Of course they are. The question is by how much? More importantly I think Apple needs to bring back to colors to the MacBook range. I know kids who like those Dell's simply because of the color.
Is this a joke? Of course they are. The question is by how much? More importantly I think Apple needs to bring back to colors to the MacBook range. I know kids who like those Dell's simply because of the color.
Correct me if I'm crazy, but I believe it's mathematically impossible to grow your sales faster than industry average and lose market share.
Am I nuts?
Correct me if I'm crazy, but I believe it's mathematically impossible to grow your sales faster than industry average and lose market share.
Am I nuts?
Unless someone else is doing the samething but at a larger rate or moving more units.
With Apple having an overall small market share, it wouldn't take much to sideline their real story if the statistics are tilted in number of units or they lump a inexpensive netbook in with MacBook sales.
Macs don't compete directly with any particular model of PC in that way. A consumer would first need to decide if they want a Mac or a PC. Then they decide which specific model of Mac or PC they want.
People buying netbooks have already decided they want a Windows notebook. The next choice is which Windows notebook.
Is this a joke? Of course they are. The question is by how much? More importantly I think Apple needs to bring back to colors to the MacBook range. I know kids who like those Dell's simply because of the color.
...
Macs don't compete directly with any particular model of PC in that way. A consumer would first need to decide if they want a Mac or a PC. Then they decide which specific model of Mac or PC they want.
People buying netbooks have already decided they want a Windows notebook. The next choice is which Windows notebook.
Exactly.
The title of this thread is set up for us to debate in this thread.
Macs don't compete directly with any particular model of PC in that way. A consumer would first need to decide if they want a Mac or a PC. Then they decide which specific model of Mac or PC they want.
People buying netbooks have already decided they want a Windows notebook. The next choice is which Windows notebook.
Or Linux for an even lower price.
Correct me if I'm crazy, but I believe it's mathematically impossible to grow your sales faster than industry average and lose market share.
Am I nuts?
Not nuts, but sales can be measured either in units or in money. So Apple could be increasing its share of the money, but losing share of units. That makes sense considering how cheap some of these netbooks are.
They are comparing all netbook sales against the sales of one smartphone. Netbooks still barely outsell the iPhone by itself. When it would be applicable to compare netbook sales against all smartphone sales. Where of course smartphones far out sell netbooks.
With Apple having an overall small market share, it wouldn't take much to sideline their real story if the statistics are tilted in number of units or they lump a inexpensive netbook in with MacBook sales.
I mean, two news bits about netbooks in a week...
People buying netbooks have already decided they want a Windows notebook. The next choice is which Windows notebook.
Not necessarily - I have an Eee 901 and have Mac OS X loaded on it. It's not perfect (wired ethernet, microphone, and webcam don't work), but for most purposes it's excellent. Accelerated graphics, sound, WiFi, etc all work fine. 1024x600 is not as constrained as you'd initially think.
Put another way, you can get a 2.2lb solid state laptop capable of running Mac OS X (and the usual Linux and Windows) for under $300. Let that sink in a minute. It's no slouch in power, either - 5 hours battery life and enough oomph to play World of Warcraft (admittedly, just barely).
I've been a Mac die-hard since the mid-eighties, but portability like that is just too hard to pass up.
The title of this thread is set up for us to debate in this thread.
Macs don't compete directly with any particular model of PC in that way. A consumer would first need to decide if they want a Mac or a PC. Then they decide which specific model of Mac or PC they want.
People buying netbooks have already decided they want a Windows notebook. The next choice is which Windows notebook.
Your logic seems confused. You say, "People buying netbooks have already decided they want a Windows notebook." So, they have decided against a Mac, whether it be because they are only interested in a netbook is irrelevant. Thus netbooks are competing against Mac portables. Really, how would you know if they looked at Apple's offerings, realized there wasn't anything that met their requirements (small, lightweight computer embodied in the netbook), and thus had no choice but to look Windows netbooks?
Not necessarily - I have an Eee 901 and have Mac OS X loaded on it. It's not perfect (wired ethernet, microphone, and webcam don't work), but for most purposes it's excellent. Accelerated graphics, sound, WiFi, etc all work fine. 1024x600 is not as constrained as you'd initially think.
Of course...to anyone with low standards, an Eee 901 running a crippled Mac OS X is perfectly fine.
Anything can be perfectly fine so long as one's standard is lowered sufficiently. To a lot of people, a 200 dollar PC running Windows is fantastic.
Anyway, the netbook market is a suicidal market. I'd love to see Apple drop its profit margins and give us more affordable products, but Apple will never do this. Even in economic turmoil.
Apple will not enter the cell phone market.
Apple will not allow third party native iPhone applications. Web apps are really, really SWEET.
Apple will never switch to Intel processors.
It should be available in Black and White and be priced around $799.
PCWorld has done a similar story. The title states netbooks outsell the iPhone...
In other news, the sale of new dishwashers completely outstrips the market for trained elephants!
Elephant trainers should be deeply concerned.
Netbooks don't hurt Apple at all, but it is hurting microsoft & PC manufactures big time, just look at Amazon.com People are ether buying Macbooks or buying netbooks regular windows laptops are just not doing to good i think. Almost everyone start's on a windows machine by default so to see this happening is big cause Macs do cost way more money and people just keep buying them at any cost
The Top 13 netbooks are loaded with XP.
Is this a joke? Of course they are. The question is by how much? More importantly I think Apple needs to bring back to colors to the MacBook range. I know kids who like those Dell's simply because of the color.
I was actually going to say "Is this a joke?" for a completely different reason. Netbooks may be picking up momentum, but I don't see Apple being concerned about it. I also don't see a need for stockholders to be concerned about it either. When the time is right, Apple will make their move. There are enough companies shelling out mediocre devices because their plan is all about offering as many products as possible. Why is everybody in such a hurry to have Apple create every computer and home appliance? You ever hear the phrase, "Jack of all trades - Ace of none"?
I think the current laptop models are pretty small to begin with. I guess if your desktop is literally a tray table you might want to get a netbook to save some space. I guess I see a netbook as a "luxury item" not a necessity. We can all survive without one, but it might be cool, less heavy, or more convenient to have one.
Now THIS makes an Apple 17" laptop seem "netbookish" doesn't it?
We've come a long way in 25 years.
Hello all! My first post! Hooray!