Article

Purpose-built netbooks create a revenue bright spot

Heather Clancy, Contributor
Apparently, someone forgot to tell netbook buyers and sellers that we're in a recession.

    Requires Free Membership to View

More resources on netbook channel opportunities
Smart monitors, netbooks to parlay desktop virtualization  

Google Android on netbooks: An intriguing proposition  

Business appetite grows for netbooks

According to new research, revenue for the category grew a whopping 72% during 2009, and white-box system builders say that despite heavy price pressure, they are gaining traction with the form factor, especially in the education market.

DisplaySearch, an NPD Group Inc. market research company, recently reported that sales for the mini-notebooks reached about $11.4 billion in 2009, compared with overall portable hardware sales of $109 billion. Unit shipments grew 103% during the year, according to DisplaySearch. Its projections call for unit shipments to grow 19% in 2010, although lower average selling prices (ASPs) will mean revenue for the category will be relatively flat year-over-year.

The other positive news for the channel is that the share of custom netbooks integrated by system builders as a percentage of the total market is also growing rapidly, much more quickly than for past portable form factors, said Steven Dallman, vice president of the sales and marketing group and general manager for the worldwide reseller channel at Intel Corp.

Dallman said netbook designs are easier than larger notebooks for system builders to manage, and thermal engineering considerations are easier because netbooks typically use lower-power Atom processors. "The number of companies designing these [netbooks] has leaped up four or five times," Dallman said. "They are definitely finding a place in the market."

Custom netbooks for education market take off

Joe Toste, vice president of sales and marketing for Equus Computer Systems Inc., a custom system builder in Minneapolis, said sales of netbooks have grown quickly in the past 12 months although it is difficult to compete with the likes of Acer and ASUS on price alone. That's why Equus, along with many other custome system builders working with the netbook form factor, are pushing hard into the education market.

Netbooks suit educators

""It's really about how to position these purpose-built netbooks," Toste said. "In this case, we have been wildly successful going after education."

One big factor has been programs across the United States that are intended to improve the ration of computers to students in K-12 education environments. Some schools are able to install three times as many netbooks using the same budget, according to custom system builders.

Donna Shepard, senior vice president of K-12 sales and operations for system builder M&A Technology Inc. in Carrollton, Texas, said Intel has helped speed adoption of its Classmate PC reference design. "Everything is portable today," Shepard said. "This is patterned after the momentum you have in the market."

M&A's version of the system ranges from 7 inches up to 10 inches and includes touch screens. Their low wattage helps extend battery life so that children can have a computer all day long, and the models are semi-rugged so that they can withstand a fall from a height roughly equivalent to the height of a child's desk, Shepard said. A 10-inch Companion PC with 1 GB of memory, a 6-cell battery, 60 GB hard drive, wireless connectivity and a camera is priced around $399.

Purpose-built netbooks suit field personnel

Erik Stromquist, vice president of system builder CTL Corp. in Portland, Ore., said his company is also winning netbook deals for the transportation, healthcare and other industries that support field personnel. CTL and some of its channel partners win deals by focusing on a rugged form factor with a water-resistant keyboard and offering creative service options, such as accident coverage or extended warranties. "Even though the market has been slower, we have been able to grow and maintain our market position," said Stromquist.

Microsel Inc. CEO Chris Schmidt said the Edina, Minn.-based systems integrator has found success with netbooks in the mainstream market by integrating products for retailers such as Tiger Direct looking to sell its own netbook brand and by creating customized log editions for corporate accounts, such as Verizon.

Netbooks have also found a following among incentives companies using the technology for promotions or as "rewards" options for points programs, Schmidt said.


There are Comments. Add yours.

 
TIP: Want to include a code block in your comment? Use <pre> or <code> tags around the desired text. Ex: <code>insert code</code>

REGISTER or login:

Forgot Password?
By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy
Sort by: OldestNewest

Forgot Password?

No problem! Submit your e-mail address below. We'll send you an email containing your password.

Your password has been sent to: