NPD Group Blog » The Netbooks Are Coming! The Netbooks Are Coming! Oh Wait, No They Are Finally Here!

The Netbooks Are Coming! The Netbooks Are Coming! Oh Wait, No They Are Finally Here!

Friday, December 5th, 2008
By Stephen Baker, Vice President, Industry Analysis

One of the biggest stress points of this holiday season in the PC business has been the status of the emerging class of small notebooks, dubbed “netbooks.” While netbooks have been around for about a year, until very recently, they were the province of the early adopter with a heavy ecommerce bent. According to NPD’s retail tracking service, 88% of all netbook sales were made in ecommerce between Q4 2007 and Q2 2008. Even in Q3, the largest notebook opportunity of the year, netbooks in ecommerce outsold those in traditional retail (2/3 to 1/3). But in October we finally got a taste of what the netbook market could really be as netbooks finally hit the volume opportunity of U.S. retail. In October, 60% of netbook sales were at retail, and unit volume nearly equaled the entire volume of Q3. To put the opportunity in real context, for those who think ecommerce sales are a significant netbook opportunity, the sales results for netbooks in Q4 2007 through Q2 2008 represented less than 1% of consumer notebook sales. Even in Q3, when sales began to appear in retail, netbooks were less than 2% of all notebook sales. Finally the October numbers show some real measurable volume with netbooks accounting for over 6% of consumer notebook sales and early November results show netbook sales at about 5% of total volume.

I have most certainly been a rather vocal naysayer about the netbook opportunity, especially without a significant presence in U.S. retail that is driven by mainstream notebook vendors and without a viable SKU count that can help create critical mass. But the Q4 results to date seem to show that we have begun to see that critical mass develop. To add more fuel to this fire, advertisements last weekend showed the appearance of the HP Mini 1000 at Best Buy, advertised alongside two Asus EEE PCs, and the Lenovo S10 at Circuit City. So we now have multiple retailers with multiple SKUs, multiple advertisements and a major PC brand joining the fray. And while it will be a few weeks before we get a read on how well these products are doing, it is good to see that they will be shelved and available during the holiday period when consumers are out and shopping and browsing. We shouldn’t make a verdict on the viability of the segment on just a few holiday weeks but it is time, after all the hype and hysteria, for netbooks to begin to prove their worth to the market, because while hype and hysteria are nice, the real test is customers shelling out their hard-earned dollars.

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