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October 10, 2009

Netbook sales drive down notebook market, says DisplaySearch

Mini-notes Q2 revenue up 264% year-on-year

By CBR Staff Writer

The value of the total notebook PC market was $26.4 billion in the second quarter of 2009, up 10% compared to the first quarter of 2009, and down 5% compared to the same period last year, according to a new report by DisplaySearch.

The report showed that the gains in the mini-note (netbook) market were particularly strong, with revenue of $3.07 billion, up 37% compared to the first quarter of 2009. The rise was 264% when compared to the same period last year.

For larger notebook PCs, revenue in every category was down compared to the same period last year, and only the portable category (those with displays from 13” to 16”) posted quarter over quarter growth. The strong growth of mini-notes drove their revenue share of the portable computer market to 11.7% in the second quarter of 2009, the firm said.

The research firm said that the lower prices of mini-notes made them attractive to buyers seeking a secondary PC for the home, as well as affordable for first-time PC buyers in emerging markets who are less likely to require all the features available on a larger mainstream notebook PC.

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According to DisplaySearch, the average selling price (ASP) for the mini-notes was $361, down 29% compared to $506 in the same period last year. The ASP for notebook PCs declined 10% to $781, while it declined 19% for all portable PCs.

The low ASPs of mini-notes are also making them attractive to telecom providers in every region. They hope to boost revenues by offering subsidised mini-notes when the customer signs a two-year data plan contract, DisplaySearch said.

John Jacobs, director of notebook market research at DisplaySearch, said: “Mini-notes have been a significant contributor to volume growth in the portable PC market as their very attractive price points make owning a secondary computer viable for many consumers.

However, the lower ASPs of these devices are clearly having a negative impact on portable PC market revenue. For 2009, we expect continued ASP erosion across all portable computer categories, leading to the first Y/Y decline of portable computer revenue.”

In 2010, DisplaySearch expects mini-notes to account for 21.5% of shipment volume and 10.9% of total revenue for the portable computer market.

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