Businesses Will Buy 3.5m Netbooks in 2010

For cost-conscious businesses looking to streamline technology costs, netbooks—smaller, less expensive versions of notebooks—provide the portability and functionality of their larger brethren.

A report from market research and consulting company Techaisle predicts midmarket companies worldwide will purchase 1.1 million netbooks in 2009, jumping to 3.5 million units in 2010.

Overall, between 22 and 30 percent of small and midsize businesses state they are looking at netbook purchases as they consider upgrading their core desktops and notebooks. A recent survey conducted by the company suggests that while some SMBs are looking at netbooks as possible replacement for desktops and notebooks, it is more likely that netbooks will be used to augment rather than replace desktops and notebooks.

Abhijeet Rane, partner and senior vice president of Techaisle, says netbook adoption among SMBs has exposed a latent need for small, affordable and lightweight devices. “This demand is being filled by netbooks and smartphones today,” Rane says. “However, larger screen sizes are driving netbook prices up and eroding the differences between netbooks and notebooks, putting further expansion of the netbook marketplace at somewhat of a risk.”

The survey found that among SMBs, two factors are contributing to the adoption of netbooks: Highly price-sensitive SMBs are taking advantage of lower prices sacrificing computing power, screen size and gaming ability; and a new segment of mobile device buyers are entering the market, expanding the market for mobile computing devices.

Techaisle predicts that while overall SMB notebook shipments are on track for a 5.4 percent growth rate, purchases of netbooks will ultimately lead to lower ASPs (average selling prices) and exert downward margin pressure on PC manufacturers. “For the netbook market to expand, there needs to be a greater value proposition differential—the subjective and objective differences in user experience between products,” Rane says.

As SMBs rein in IT spending, the latest casualty is spending on replacing existing desktops and notebooks, which accounts for the largest chunk of SMB IT-related spending. As IT budgets get trimmed, technology companies have been quick to offer netbooks of their own.

While Asus pioneered the netbook field with its Eee PC, it seems now that every PC vendor has its own version of these mini-notebooks that use some variant of the Intel Atom processor. Hewlett-Packard, Dell, Lenovo, Sony and others all offer comparable features, screen sizes and price points.

While Apple has repeatedly denied any interest in the netbook market, search giant Google has been actively pushing for its open-source operating system, Android, on netbooks. HP, Dell and Acer are all expected to have Android-based netbooks in the works. In April, Acer CEO Gianfranco Lanci and product manager Jim Wong confirmed they’d been experimenting with Android in the labs but suggested a market-ready model was some ways off.

Dell, on the other hand, may be preparing an Android-powered netbook for the market with relative expediency. Software solutions provider Bsquare announced yesterday that it is porting Adobe Flash Lite 3.17 technology onto Android-based Dell netbooks. However, a spokesperson for Dell responded that Bsquare “erroneously mentioned Dell,” and that the news release is being recalled.