Netbook Sales Projections Are Way Low: Quick Reality Checks

According to the latest IDC projections, projected netbook sales will be 21.5 million in 2009. Now that is what I call conservative! If you're basing your business on projections, I strongly advise you do your own diligence here. Quick reality checks:

According to DisplaySearch, 5.6M netbooks were sold in Q3'08 alone (outpacing iPhone). I'm certain Q4'08 will be much higher but that's a yearly run-rate of 22.4M, and netbook sales are going exponential. A quick check on Amazon showed that all top-10 entries on the best-seller list for notebooks were netbooks/mini-laptops! They're cheap, and are substitutes for notebooks, especially when the World is getting hammered by a recession.

Looking forward, ARM netbooks will debut mid next year, likely with Android. And some with Ubuntu. Those aren't even factored in. Additionally, the European model of subsidizing netbooks with a wireless service plan has entered the US market, and will likely enter others, driving even faster adoption.

And did I mention educational Linux pickup? By the end of 2009, 52 million students in Brazil. Every school in Russia. And it just keeps going on. Could be 100 million new Linux users by end of 2009. I'm thinking a lot of them are going to have a netbook...

If you're still not a netbook believer, dumpster dive the Marvell Technology Group (MRVL) F3Q09 Earnings Call transcript:

Over the last year or so, we have witnessed the emergence of the net book market place. We see these devices as early examples of a larger trend, which offers Marvell a high-volume market opportunity.

[...]

In our view, the potential to develop a converged mobile product, which would sell between US$100.00 to US$200.00 is only less than 12 months away. At this price point, we believe consumers within emerging markets will drive significant volumes far in excess of the current notebook PC market and likely equal a greater volume than smart phone markets.

Adding to the fire, I've seen a trend in blog reports of people dumping their big notebook computers, and using something smaller like a netbook, or just their smartphone. If anything, the combination of world recession, emerging markets, and educational Linux pick-up will accelerate netbooks sales. It would not surprise me to see IDC off by 50% on 2009 netbook sales.

Disclosure: no positions

Comments

[Hedged In:]

Good discussion of the netbook market. The stock that will be most impacted isn't mentioned -- it's Apple, which doesn't have a netbook product.

2008 Dec 16 02:30 AM

[granger:]

good info, Thank You

2008 Dec 21 02:40 AM

[Paul Sterne:]

Interesting article but you overlooked one of the pioneers in the Linux netbook space, Xandros. Xandros is the industrial class GNU/Linux OS shipped in the Asus eeePC and it is way ahead of Ubuntu in market penetration and customer sat. Having worked with Ubuntu on a number of ports, I was not impressed by the quality of their engineering -- they sell more hype than substance. I would expect Xandros to ship a commercial version of a LInux desktop OS on ARM before the other market participants.

Jan 08 12:40 PM

[ikkiwae:]

The acceptance of netbooks has taken the industry by surprise and we must not forget that the so called reserach agencies like gartner, idc by extension of their responsibility a part of the industry themselves.

Sep 29 09:40 PM