Have netbooks saved the computer industry?

15 Oct 2008

Strong demand for the new class of affordable computer known as the netbook helped to prop up the computer industry’s performance in the third quarter, which can be described as soft in most places.

Worldwide PC shipments reached 80.6 million in the third quarter, up 15pc on last year.

However, dependable indicators such as back-to-school PC sales failed to deliver as the market began to feel the impact of the credit crunch.

That wasn’t the only shock. In Europe, HP lost its No 1 position to Acer, which is also performing aggressively in other world markets.

“The mini-notebook segment experienced strong growth in the global PC market, led by robust growth in the Europe, Middle East and Africa (EMEA) region,” said Mika Kitagawa, principal analyst for Gartner’s Client Computing Markets group.

“In the North American market, the economic crunch created more interest in the sub-US$500 segment. Because the mini-notebook is still a new segment, it is too early to determine if the emerging segment created new market opportunities, or if it cannibalised lower-priced systems.”

“At the same time, the global PC market finally felt the impact from the global economic downturn. The US professional market experienced the biggest hit from the economic crunch. The US home market saw definite softness in PC sales after a few quarters of strong growth,” Kitagawa said. “The Asia/Pacific PC market was impacted by a slowdown in China. PC growth in Latin America was slow relative to historical levels, but was still in line with the forecast.”

HP maintained the No 1 position in worldwide PC shipments in the third quarter of 2008. The company was impacted by a slower entry into the mini-notebook market, losing the top position in EMEA. Dell’s recent expansion efforts did not equate to increased market share in the third quarter. Dell primarily struggled with the professional market, especially in the EMEA and US markets.

Two vendors that had a strong focus and acted quickly in the mini-notebook segment were Asus and Acer. Both of these vendors experienced robust growth. Although most major vendors now have their own mini-notebook offerings, Kitagawa said it will be a challenge for these vendors to match or beat the market expansion that Asus and Acer have attained so far.

PC shipments in the US market grew 4.6pc in the third quarter of 2008 from the third quarter of 2007. Early indications suggest that the professional mobile PC market had slower-than-expected growth, while desk-based PC shipments were in line with previous expectations. Mini-notebook shipments accounted for approximately 5pc of US mobile PC shipments and added approximately 1-2 percentage points of year-over-year growth.

“Despite the back-to-school sales season, the US home market did not see its typical seasonal spike during the quarter,” Kitagawa said. “The continued decline of the average selling price (ASP) of PCs did not stimulate sales as much as the vendors had hoped.”

Dell maintained the top position in the US market, but its growth slowed compared to its last several quarters. Dell was impacted by weakness in the professional market, as well as slowdown in the home segment.

Apple maintained the third position. Apple is expected to see steady growth in the education and home segments. Acer’s PC shipment growth was accelerated by mini-notebook shipments in the quarter. These systems have been well received in the US professional and home segments.

PC shipments in EMEA totalled 28.8 million units in the third quarter of 2008, a 25.9pc increase from the third quarter last year. The EMEA PC market performance was largely dictated by vendors that shipped mini-notebooks and those that did not, resulting in significant movements in the EMEA top 5 vendor positions.

For the first time ever since HP merged with Compaq, it lost its No 1 position in the EMEA PC market to Acer. Acer bolstered its shipment numbers with a significant number of shipments into the telecoms and retail channels across western Europe. Acer accounted for 20.6pc of shipments in the region, and HP accounted for 18.7pc of shipments in the third quarter of 2008.

By John Kennedy

Pictured: the Asus Eee PC, one of the new breed of PCs – the netbook – which helped Asus experience robust growth in Q3

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years