Monday, December 15, 2008

Netbook vs. Smartphone’s

Netbooks in PC segment and Smartphone’s in Mobile Phone segment are two bright spots in this global economic downturn. .According to most industry analyst

Smartphone growth in 2009 is expected to be 31% when overall mobile phone mkt contract by 5%.

NetBook growth is expected to be around 15% when desktop PC sales drop by 5%

Above mentioned figures becomes more interesting when you compare that most part of developed economies are going to have 2% negative GDP growth.

The point of this posting is not to throw stats to prove that these 2 segments are growing, But to study why they are growing and also if these 2 segments address the same customer segment in which case they compete against one another.

Netbooks: A netbook is a very small, light-weight, low-cost, energy-efficient laptop, primarily used for internet based services such as web browsing, e-mailing and instant messaging. So in short Netbooks are targeted for customers who want to a device primarily for connecting to internet .These netbooks tend to be much cheaper than traditional laptops. On an avg you can get netbooks for 350$.so some one may ask how is it different from mini laptops that are out there the key difference is the cost and also features .mini laptops tend to be more expensive than laptops and tend to have all features like laptop (like graphics, memory capabilities etc) were as netbooks are though smaller than laptops then have much stripped down but net targeted features and subsequently they are cheaper as well. If you consider that most laptop or desktop usage is for internet access netbooks present success is not a surprise .So far netbooks in my opinion is not creating a new separate segment or mkt for PC but rather capturing the mkt for laptop and mini laptops. As customers see it as a cheap and perfect alternative for PC that meets their needs.

Two key players (Intel and Microsoft) in PC industry are backing up netbooks we can expect lot of new models soon in mkt .Intel has introduced netbook targeted ATOM processor which is much more energy efficient then PC processor (like Pentium and centrino family) which should extend battery life of netbooks allowing to be more mobile then present laptops.Microsft recently announce that they would continue supporting XP as long as there are mnf shipping them .MS previously had said that they would stop supporting XP as they wanted people to migrate to vista but due to pressure from Linux which was tending to capture large mkt share in netbook category backtracked its statement .Since most of netbooks if they run windows they run XP version and not vista due to technical HW limitation and costs this move by MS will help netbooks availability and sales .

SmartPhone: I have written lot about Smartphone in my previous posting so lets not get into basics of Smartphone key thing to mention here is that Smartphone are ever increasing becoming smarter day by day and also there screen size and resolution are improving drastically .Not only that their memory are quite high but also processing capabilities are high .For example N97 announced by Nokia as 32GB inbuilt memory. So with new players like Apple, Google entering this space I expect this segment to grow and also be very dynamic.

So some might argue that Smart can replace netbooks but my strong feeling is it wont at least in short term .Because I still believe that netbook buyers are typically PC/laptop buyers looking for cheap and targeted device alternative and Smartphone buyers are typically phone buyers who are looking for phone that does something more than phone functionality like access net, email etc especially when they are mobile and don’t have access to laptops.

So in short I don’t see them as substitutes but I do believe both product categories trying to address their limitations

  • Netbooks boot time and battery time is not good enough to be truly mobile like Smartphone
  • Smartphone form factor is not good enough to do extensive work on device like you can do on net book (like surfing or editing documents etc).

As these products tend to solve these limitations it would create opportunity for new players to enter these segments like Apple and Google entering Smartphone space .One interesting thing to note here is that as laptop/Pc players like Apple enter Smartphone does it trigger Mobile phone vendors to enter netbook segments .


Arun said...

I think apple might enter netbook market. Netbook users usually don't care about visual studio and other windows compatible tools running on it. If you have
1) Browser
2) IM
3) Office app (esp Microsoft office)
4) Skype with webcam / speaker / mic
You are good to go..

Apple has been saying they don't know how to make a good 500$ laptop. But, If netbook picks up. Than can make a sub 500$ netbook.

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