Netbooks flourish in summer
Sales surge in the back-to-school period but not at the expense of mainstream portables, says Marie-Christine Pygott
Much of the portables growth in UK distribution last year was generated by stronger-than-expected sales of netbooks to consumers, pushed by increased diversification of systems, alternative routes to market and consumer price worries.
What is more, in periods such as the third quarter of 2009, they were able to more than offset an actual year-on-year decline in mainstream portable sales. By the end of 2009, netbooks conquered a staggering 35 per cent of the notebook market in UK distribution and considerably cannibalised mainstream notebook sales.
During the first half of 2010, however, the netbook market began to show clear signs of maturity. Netbook volume growth in UK distribution began to slow near the end of Q1 and in Q2 they sold more slowly than mainstream portable systems.
While slowing netbook growth was partly because of the growing netbook base, it was also down to an increased consumer awareness of the limitations of netbooks, coupled with a renewed consumer interest in mainstream notebook systems.
Mainstream notebooks drove portables growth in May, when their sales increased 31 per cent year on year. Netbook unit growth was only six per cent. The picture remained similar in June, when mainstream portables benefitted from a 24 per cent volume increase compared to last year, while netbook unit growth stayed low, at six per cent, during the same period.
As expected, netbooks enjoyed a growth spurt during the back-to-school period. July netbook unit sales through UK distribution grew 49 per cent year on year. In August, netbooks grew 29 per cent year on year.
Clearly, industry expectations in early Q3 were high for sales of inexpensive portables to private users during those months.
What was new this time, however, was that strong netbook growth did not affect the growth of mainstream portables, quite the reverse. Sales of mainstream systems increased by a healthy 30 per cent year on year in July, and in August even managed to outpace netbooks once more, with a 32 per cent growth rate.
Like netbooks, mainstream notebooks benefitted from vendor and channel preparations for the back-to-school season. Of all Windows-based mainstream portables going through UK distribution in July and August, consumer OS-based systems grew 55 per cent from the same period last year, while business OS-based machine sales rose 19 per cent.
While netbook demand surged in the back-to-school period, consumers also showed a strong increasing interest in price-aggressive mainstream notebooks.
The £300-£400 price band made up 60 per cent of Windows consumer OS-based mainstream sales in August 2010, compared with only 28 per cent last year. The share of the £150 to £300 segment fell from 46 per cent to 22 per cent.
The netbook market will probably keep maturing. Consumers’ increasing awareness of netbook limitations, improving economic conditions and a subsequent rise in
consumer confidence coupled with a mainstream portable technology launches will renew interest in mainstream portables.
Will netbook sales face increasing cannibalisation from the expanding tablet PC sector? At this point, consumers’ buying decisions will likely be influenced by price, but with a lot of tablet PC launches imminent, the ASP for tablets is likely to go down and consumers will de-emphasise price in their buying decisions.
Marie-Christine Pygott is a senior research analyst at market research company Context