Netbooks: Still a long way to go

When it comes to technology, there's no looking back. Cheaper and smarter
technologies are always welcome by both end-users and corporates. Earlier, there
were large-sized PCs and desktops, which were later taken over by laptops. Then
came notebooks, and now netbooks (also called sub-notebooks). The second half of
2008 saw the emergence of these ultra-small (screen size >10-inch and weight
about a kilogram) fully functional and affordable mobile PCs priced even lesser
than smartphones (less than Rs 25,000).

Past Vs future

According to Gartner, approximately 30,000 net­books were shipped in India
during July to September 2008. On the other hand, the notebook PC shipments
touched 1.8 million units in CY2007 (as against 0.98 million in CY 2006). By
2010, Gartner reckons that more than 50 million netbooks will be sold.

According to IDC, the global netbook category is estimated to be 8.1 million
units this year, with more than 25 million in 2008 and 2009 alone.

While research firms are going gaga over the growing figures of netbooks,
major laptop vendors are not very optimistic about notebooks being replaced by
netbooks.

Giving his reasons, Diptesh Ghosh, Head- Consumer Notebooks, HP PSG India
said, “Though netbooks promise a different experience and they will get just
better from here on, but due to varied functionalities and requirements,
netbooks will not be replacing notebooks any time sooner.”

Agreeing with him is Stanley Wu, Country Head-Notebooks and Eee PC, Asus
India, who explained taking the example of desktops. “The Indian netbook market
is likely to witness

100 percent growth this year, and reducing the prices further will result in
higher sales of netbooks. But still they cannot completely replace the desktop
as they offer faster computing options.” For slow penetration of netbooks, Wu
blamed lack of awareness among the target segment.

Ranjit Yadav, Director- IT, Samsung India Electronics is expecting the
netbook market to double this year in comparison to last year. “Available
projec­tions indicate that the size of the global netbook market is expected to
touch 25 million units by next year,” he added.

On the contrarye, Anurag Arora, Country Manager-Business Note­books, Personal
Systems Group, HP India Sales said, “Given the growing usage of notebooks today
and also the varied profile of people, it is not one category eating into
other's share, but it's about co-existence of both. It completely depends on the
requirement of customers.”

The good and the bad

Netbooks are attracting buyers from both consumer and commercial segments.
While netbooks are evolving, a major hassle is the compromised keypad, but
vendors are making concerted efforts to standardize the netbooks keypad to make
it as close to the fully functional keypad of a conventional notebook. Netbooks
serve the purpose of a mobile customer with a reasonable good battery life and
slim form. They also give high value for money, as it has all the features that
a laptop has, even the performance is matched.

“Because of lower processor speeds as compared to notebooks, multi-tasking
can be a challenge with netbooks,” informed Ghosh of HP.

“What a netbook scores on is extended battery life. Also from a completeness
point of view, there is the full suite of wireless connectivity, Bluetooth, rich
set of ports, near full-size keyboard, touch pad and an inbuilt camera, all
available on a netbook,” informed S Rajendran, Chief Marketing Officer, Acer
India.

Elaborating on the same, Yadav informed, “Netbooks typically run either on
Linux or Windows XP operating systems rather than more resource-intensive
operating systems like Windows Vista.”

Wu explained, “When compared on the basis of battery backup, the netbooks
have an edge over notebooks, while on the functionality parameter notebooks will
be preferred owing to the faster processing speeds. There are many other factors
which differ in both the products, such as the absence of an optical drive in
netbooks. But some similarities also exist, such as the portability factor,
power saving modes, etc."

The price factor

The price of the netbooks ranges from Rs 15,000 to Rs 25,000, while an
entry-level notebook starts above Rs 30,000.

Arora shared, “The prices of both netbooks and notebooks may change but the
cost difference will always be present due to the functionalities offered by
both, and netbooks are unlikely to cannibalize sales of their larger cousins.
According to Gartner, the notebook market is growing at a rate of 50-60 percent
and hence netbooks are not going to affect its market. There will be a small
fraction (say around two percent) of people who will buy netbooks instead of
notebooks.

Detailing on the same, Rajendran shared, “The first generation of the netbook
too was attractively priced and received a great acceptance in the market. As
part of its continuous process

of improvement, a new generation netbook with larger screen size, Bluetooth and
better battery performance has been launched. The new 10.1-inch netbooks from
Acer for instance is available at 21,999+ tax which makes it most aggressively
speced and one of the best priced mobile computing solutions.”

Ghosh added that due to their affordability, companies are eyeing such
products even as a gifting option and sales force automation.

Branding initiatives

To promote the netbook segment, several compa­nies are heavily investing
into its branding.

As part of this, HP has tied-up with the recently concluded Wills Lifestyle
Fashion Week 2009. “Blending fashion with technology has helped HP gain the
premium consumer edge and redefine the brand proposition. We had also tied-up
with fashion designer Vivienne Tam to launch Vivienne Tam Digital Clutch
notebooks,” informed Ghosh.

Samsung on the other hand realizes that it is the new entry in the netbook
segment and is making efforts to establish itself as a serious player in this
segment. Yadav said, “Samsung notebooks and netbooks come with the reassurance
of Samsung service, free pick-and-drop service (within the municipal limits of
the service center) and a one-year international warranty. We have another
branding initiative called 'Live 360 campaign'. Through this, we are focusing on
ensuring product display in large-format retail as well as expanding the number
of micro retailers. In line with the brand positioning of Live 360, the Samsung
notebook PC consumer campaign will be promoted through advertising, newsletters
and direct mailers.”

On a concluding note, netbooks might not be the hottest technology as of now
but seeing that leading vendors like MSI (Wind series), HCL (MiLeap series),
Acer (Aspire One), Lenovo (Ideal Pad-S series) have jumped the bandwagon, it is
widely believed to be one of the most sought after tech gadget of 2009.