Current Issue
This Month's Print Issue

Follow Fast Company

We’ll come to you.

Is The Netbook Phenomenon Over? In a Way, Yes

New research by IDC points to falling sales of the chip that drives the majority of netbook PCs—Intel's Atom CPU. One suggestion is that the first quarter 33% drop is a sign that the netbook's rise to fame is on a down trend. In truth, that's not quite right. But the situation is complex.


IDC doesn't see the steep fall-off in sales of Atom chips between the end of last year and the first quarter of this year as symbolizing a problem directly: the suggestion is that manufacturers built up large stocks of the chips during the year, and were simply burning through them in the first part of 2009.

As well, consumers often spend less immediately after the holiday season, and sales of netbooks could rightly be expected to fall during the first three months of the year. But as Reghardware notes, the fact that companies built up a stockpile of CPUs suggests they didn't meet their own high sales expectations for 2008—perhaps the netbook wasn't as popular as originally imagined.

But it's not all about sales numbers. 

The machines have also reached a development plateau. For one thing they're no longer brand new, and the public has gotten used to the idea of a small, cheap, low-power portable PC. They're also getting used to the limitations of this computing platform—netbooks simply aren't as capable as full-featured notebooks. Furthermore the phenomenon label given to netbooks was truly deserved, with the machines going from nowhere to hundreds of very similarly designed PCs from small and big name manufacturers alike. And there was seemingly little to distinguish them in terms of specification or design. That's never a good thing from a consumer point of view. Market saturation is no doubt also responsible for the most recent generations of netbooks which are almost, but not-quite, full-on laptops.

Technically-savvy consumers also know that Intel has a new breed of Atom chips due soon, as well as a Consumer Ultra Low Voltage chip that sits halfway between the Atom class and fully-powered notebook CPUs, and they may be waiting for those machines before making a purchase. There's also a rival chipset from Via, the Nano, that may be affecting Intel's sales

As for the future, as the economy picks up through this year—and it's going to—the average computer user may think twice about spending less on a neat, but technically limited machine, and choose to spend a little more cash on a proper laptop.

It's a complex situation. And depending on where you look for your news, analysts and tech gurus are foretelling either doom or incredible fortune for netbook makers in 2009. One thing is for sure: the netbook as a phenomenon is over. From now on, it's just another class of computer people can buy, and it'll likely suffer the same market forces as every other PC.

[via RegHardware] Image from UMPC Portal

Related: What's Next for Netbooks? Acer and Asus Reveal Plans
Related: Windows 7 for Netbooks, Limited to Running Only Three Apps at a Time
Related: Intel Atom: Intel Makes Its Smallest Chip Ever From Issue 129 | October 2008