While PC shipments will grow to a million per day, netbooks are in decline

While PC shipments will grow to a million per day, netbooks are in decline

Summary: While PC shipments have staged a comeback this year, Gartner’s researchers have reduced their sales forecast for the second half of the year by 2%. Previous warnings by analysts were confirmed by an Intel statement on Friday that it was lowering sales forecasts.

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TOPICS: Tech Industry
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While PC shipments have staged a comeback this year, Gartner’s researchers have reduced their sales forecast for the second half of the year by 2%. Previous warnings by analysts were confirmed by an Intel statement on Friday that it was lowering sales forecasts. It said: "Revenue is being affected by weaker-than-expected demand for consumer PCs in mature markets."

Gartner is now projecting worldwide PC shipments of 367.8 million units in 2010, a 19.2% increase from 308.3 million units shipped in 2009. This will be the first time PC shipments have averaged a million per day.

Gartner research director Ranjit Atwal said in a statement:

"Consumers buoyed the PC market in 2009 as businesses delayed their purchases. The slow pace of economic recovery and austerity measures in Europe have made PC suppliers very cautious in 2010. However, consumer demand is likely to remain strong even if the economic recovery stalls because consumers now view the PC as a relative 'necessity' rather than a 'luxury' and will continue to spend on PCs, even at the expense of other consumer electronic devices."

This should not affect the ‘corporate refresh cycle’ as businesses move from Windows XP to Windows 7 because "businesses will find it very difficult to delay PC replacements further. The age of the professional PC installed base is already at an all-time high."

Atwal said:

"Businesses that delay replacing much longer risk alienating employees, burdening themselves with more service requests and support costs, and ultimately facing higher migration costs when they eventually migrate to Windows 7. The bottom line is that businesses need to refresh their PCs sooner rather than later. Thus, the full bloom of the long-awaited professional PC refresh can't be more than a few quarters ahead."

Gartner also sees diminishing sales of netbooks, which it calls mini-notebooks. Netbooks accounted for 20% of mobile PC sales at the end of last year, but Gartner expects it to fall to around 10% by late 2014.

"The recent decline in mini-notebooks' share of the mobile PC market reflects a general realisation among buyers that mini-notebooks are less-than-perfect substitutes for standard low-end laptops," said Gartner’s Raphael Vasquez. He said:

"Buyers who once would have bought a mini-notebook based solely on its low price now seem more inclined to buy a low-end standard notebook, especially since the prices of the two have converged. Mini-notebooks are slowly but surely carving out a market niche for themselves as companion devices. However, the emergence of media tablets is a growing threat to that niche."

Gartner counts tablets with "full-function operating systems" such as Windows 7 in with PC sales, but not tablets with a "restricted-function OS", such as iPhone, Android and Chrome. "Nonetheless, media tablets will affect the PC market, especially mini-notebooks, and the forecast reflects this impact," said George Shiffler, research director at Gartner.

Shiffler said: "The iPad hasn't had much of an impact on mini-notebook units so far, if only because it is generally priced higher than most mini-notebooks. However, we anticipate lower-priced iPad imitations will begin to take larger bites out of mini-notebook units as they are released next year."

Topic: Tech Industry

Jack Schofield

About Jack Schofield

Jack Schofield spent the 1970s editing photography magazines before becoming editor of an early UK computer magazine, Practical Computing. In 1983, he started writing a weekly computer column for the Guardian, and joined the staff to launch the newspaper's weekly computer supplement in 1985. This section launched the Guardian’s first website and, in 2001, its first real blog. When the printed section was dropped after 25 years and a couple of reincarnations, he felt it was a time for a change....

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22 comments
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  • I would be surprised if netbook sales decline as they suggest. They are cheap and very affordable machines, with ultra portability. And portability is the way everything is going now. I would be curious to know what exactly they mean by "mini-notebooks are less-than-perfect substitutes for standard low-end laptops". What did the customers NOT like about them? Netbooks are still quite a bit less expensive than low end laptops. I have heard complaints that Windows 7 netbooks are slow and have limited software. I have not heard a single complaint from people I know that run Linux on their netbooks, because it has all of the full features.
    Chris_Clay
  • @apexwm

    > I would be curious to know what exactly they mean by "mini-notebooks are
    > less-than-perfect substitutes for standard low-end laptops".

    I haven't asked, but small screens with limited vertical resolution, cramped keyboards, slow processors and lack of optical drives could be limitations for some users.

    > Netbooks are still quite a bit less expensive than low end laptops.

    You can buy a low-end laptop for £300 or so, and some netbooks cost more than that. If you upgrade the netbook to 2GB -- which Amazon seems to recommend when you buy one -- you're probably not saving much.

    > I have not heard a single complaint from people I know that run Linux on
    > their netbooks, because it has all of the full features.

    Really? I've heard mostly complaints about the poor and/or incomprehensible user interface, people struggling to install software, their inability to run popular programs and inability to get 3G dongles working. A lot of them went back and got Windows machines instread, all of which led to Linux being a disastrous failure in the netbook marketplace. (Linux went from 100% market share to less than 5%.)

    No doubt some of these problems could have been solved if a Linux expert had been there to give them a hand, but there are not many around. The suppliers (manufacturers, telcos, retailers) aren't interested in the very high support costs of dealing with Linux newbies.
    Jack Schofield
  • "No doubt some of these problems could have been solved if a Linux expert had been there to give them a hand, but there are not many around."

    It's too bad that people aren't informed of the tremendous community support available. Plus, I would point my finger at the vendors if they released a netbook with Linux, that was not running with everything working out of the box. I would expect the same if it was running Windows, too.

    "The suppliers (manufacturers, telcos, retailers) aren't interested in the very high support costs of dealing with Linux newbies."

    Yes, but I bet they become overwhelmed with supporting Windows problems as well. Linux is and will always be "set and forget". No matter which OS they choose, support will always be an issue for vendors. When you call Dell and try to get Windows support, you get the attitude that you are the hundredth caller that day with the same issue.
    Chris_Clay
  • @apexwm

    I discussed this endlessly with senior people at all the big netbook suppliers including UK marketing and managing directors, a director of Europe, and two CEOs in Taiwan. I recommended that they all support a common Linux, and they all decided to do whatever they wanted as long as it was different. They all got screwed trying to deal with several different dongles across more than a hundred telcos in 35 different countries. Fact is, when things went wrong, *they* had a very expensive problem and their users had no hope. If they had a problem with Windows, somebody else would fix it.

    To add to the pain, they had to sell Linux notebooks for less money, with no Microsoft advertising support, and no money coming from eg anti-virus suppliers. In fact, it also cost them more to ship those cheaper Linux units in terms of manuacturing, distribution, stock control and advertising. Then they ran into expensive support overheads and returns. All in all, it was pretty much a financial disaster.

    I know Linux fans think shipping 20 million Linux netbooks is a piece of cake, but really, it's not.
    Jack Schofield
  • Jack : They should probably have done like System76 : http://www.system76.com/, a successful company with a successful line of Linux systems who have built a good reputation. Their loss, I guess, for not doing it right the first time.
    Chris_Clay
  • Loathe as I am to admit it, I'm afraid Jack's got a point: the versions of Linux on the early netbooks were pretty awful, and too fragmented.


    Take the version of Xandros that came on the original Asus EEEPC. It was fine for what it did, but if you wanted to upgrade any of the (already very old) apps on there, it was a nightmare. It also hogged 2 Gig of its 4 Gig flash drive space for an OS “backup”. I was already half-way Linux savvy when I got mine, so I was able to wipe the whole thing and install Ubuntu, so getting that locked up 2 Gig back in the process.

    But mum and dad Pc-world shopper simply aren't going to do such things. Neither is your local, friendly PC shop, either through sheer ignorance of Linux or because they see no up-selling potential in it for them (think Office and anti-virus). That's the ones that aren't too busy trying to steal your bank details or copy your beach holiday photos, of course.
    http://news.sky.com/skynews/Home/UK-News/Sky-News-Undercover-Laptop-Investigation-Repair-Shops-Caught-Hacking-Into-Personal-Files/Article/200907315343387


    If the early Linux netbooks had all standardised on Ubuntu, as System 76 has done, they might have stood a chance. But only a chance, mind you. Microsoft's voluminous bag of cash and dirty tricks would likely still have won the day.
    BrownieBoy-4ea41
  • @BrownieBoy
    > If the early Linux netbooks had all standardised on Ubuntu,

    Which is exactly what I told them to do.....
    Jack Schofield
  • The appallingly broken state of Linux on early netbooks (one model you had to root to add a package installer, and everything with Netbook Remix not being able to connect to password-protected network drives) wasn't the issue for users, according to the notebook manufacturers and support folk I talk to; it was an unfamiliar interface and not being able to run their Windows apps. Community support is all very well, but a lot of people want to use what they're familiar with and keep their investment in software.

    What I'm expecting to kill netbooks - or at least make them a much smaller part of the market - is ULV chips, especially from AMD, and the way that today's cheap notebooks and ultraportables are delivering what people thought they were originally buying with netbooks: a small, light, low-priced notebook. Adding hardware accelerators to Atom and putting it in a 10" case or going for a decent processor in the first place and having a usable keyboard, big enough screen, more storage and still decent battery life - when the price is much the same, netbooks end up being most appealing to those who want the portability above all and that's not the majority of buyers. The netbook's success was about the price tag and really nothing else; we should be glad they've pushed the whole notebook price level down to where there's a huge choice.

    Windows 7 runs just fine on netbooks by the way, so there's no need to perpetuate that canard; I'm using it on 3 or 4 different models regularly. Add some of the terrible AV software that's still around and you can slow a PC of just about any processor to the speed of treacle; I'm routinely recommending people to remove Norton and use Microsoft's Security Essentials to get virus protection without destroying performance.
    M
    Simon Bisson and Mary Branscombe
  • "Linux being a disastrous failure in the netbook marketplace. (Linux went from 100% market share to less than 5%"

    Obviously untrue. Here is several counter points:

    http://www.computerworld.com/s/article/9140343/Linux_s_share_of_netbooks_surging_not_sagging_says_analyst

    http://blog.laptopmag.com/one-third-of-dell-inspiron-mini-9s-sold-run-linux
    j.a.watson@...
  • Jamie, you bring up a good point. There hasn't been much news regarding netbooks in a while, especially on what they are running. Jack doesn't state what his source was. I did a little researching too, and all of the reports that say that Windows is 95%+ of the netbook market is posted by you know who... Microsoft! I haven't found any standalone 3rd party (non Microsoft sponsored) reports that say Microsoft is at 95%. Most of them show Linux at 30%+ just as you found. It's also good to note that Microsoft is doing its usual by posting numbers of netbooks SOLD with Windows, which is not reflective on the number of netbooks actually running Windows vs. Linux. Obviously the difference between the two is from people purchasing netbooks with Windows (since they are very common and cheap), throwing away the Windows software and installing a flavor of Linux.
    Chris_Clay
  • So you're saying that some 25 percent of netbook buyers throw away a copy of Windows they've paid for and install Linux instead. If netbook users do that, why don't notebook and desktop users do it too? Or maybe they do?
    Manek Dubash
  • Mary : Being familiar with both Windows and Linux extensively, I would be curious to know what kinds of learning issues there were with Linux Netbooks. I've deployed Linux desktops to many people, and the acceptance has been very good. They quickly find their way through the programs, and the Gnome desktop is very easy to navigate. It's very much laid out like a Mac, which if you ask users they will also acknowledge that it's very easy to use. In my opinion, Windows 7 is much more difficult to learn for the average user.
    Chris_Clay
  • @manek - No, I'm saying that there are concrete statements from netbook manufacturers and REPUTABLE analysts that indicate the Linux share of the netbook market is very substantial.

    @apexwm - "Jack doesn't state what his source was" He seldom does, especially when he makes wild statements like this one. It falls in the same category as "You can buy a PC for 1 pound a day" or "... 50 cents a day"... or whatever bizarre number he chooses to pull out of thin air.

    jw
    j.a.watson@...
  • Speaking purely from observation, I've seen only a handful of people actually using netbooks (and have one myself). None of them were running Windows.
    Tezzer-5cae2
  • @Jack, @Manek, @apexwm; Nobody can say, with 100% certainty, the percentage of netbooks running Linux. You can say xx% are running windows, if you count the numbers sold, sitting on store shelves, or waiting to be shipped. But, as stated, how many are trashing windows, and installing Linux? I own one that came with XP, and due to the slowness, I kept it on for one day, and it is now running a full fledged version of PCLinuxOS, and running much faster than XP, and hasn't slowed down after 18 months of use. The only regret I have is being forced to pay for XP, which MS counts me as a windows user, even though I'm not. And, I doubt that I am an unusual example of a netbook owner.
    ator1940
  • manek : Yes, as ator1940 pointed out, some do throw out the Windows discs and install Linux. I do the same thing. I've also obtained the "Windows Tax" refund from Dell on occasion. As we've mentioned, usually you can find netbooks with Windows cheaper than you can with Linux. Vendors frequently run sales, etc., and Linux isn't offered on the cheaper deals. This isn't always the case, but usually. Same thing definitely applies to regular desktops and laptops.
    Chris_Clay
  • I didn't respond to that portion of Maek's comment because I assumed that I am not a normal case, but at least by the standards here I do seem to be. I own, or have owned, or bought and prepared for friends, at least six netbooks over the past year or so. Two of them were purchased with Linux (SLED 10, on an HP 2133 and an HP 2140), and four with Windows. When it was possible to get a refund of the Windows Tax I did so, and wiped Windows without ever booting it. When it was not, I kept windows and simply repartitioned the disk so I could multi-boot Linux and Windows. One of these is now being used by my partner, and two are being used by friends, all running exclusively Linux. So in the end, yes, I "threw away" a copy of Windows that had been paid for, and replaced it with Linux.

    I didn't want to get involved in Mary's comments above about the Linux on early netbooks being "appallingly broken", because I don't agree with that. But to be perfectly honest, I found the SLED 10 preloaded on the HP netbooks to be pretty awful compared to any of the current Linux distributions, and I basically wiped and replaced it every bit as quickly as I did the preloaded Windows. We have to be honest with ourselves here - it's all well and good for me/us to say how bad Windows is on netbooks in particular, but if the preloaded Linux is no better, what are the alternatives? It is totally unrealistic to expect the average consumer to buy a netbook and then find, download and install some decent version of Linux themselves.

    jw
    j.a.watson@...
  • Jamie, that's interesting about your bad experiences with various flavors of Linux like SLED 10. I've read before that it's not nearly as refined as distributions like Ubuntu, Fedora, SuSE, etc. In the case of a bad Linux netbook that clearly had software flaws, I'd definitely have to point my finger at the vendor. I get the vibe from a lot of vendors that they just don't care about their Linux sales. Either they must lack the technical expertise to produce a strong Linux image for their machines, or I guess there's always the theory of Microsoft breathing down their necks so they don't really pursue it much. Some claim that vendors don't want to deal with the support, which I find pure rubbish. The vendors will have loads of support calls no matter which path they choose. Nobody can say that they haven't been flooded with calls since Windows 7 started rolling out. I would actually think the support calls would be much higher with Windows due to constant maintenance and problems that naturally come with Windows, whereas Linux is "set and forget".

    When you see successful companies like System76 that are selling nice quality machines with good reviews and little to no problems, you would think vendors like HP and Dell would try to compete more. Sure, they've made efforts, but HP's decision to wander off with their own distribution was surprising. And Dell has made little effort at really pushing their line of PCs with Ubuntu. We shall see moving forward, if the vendors are really serious about selling PCs with Linux. In the meantime, we'll just have to continue buying Windoze, requesting the Windows Tax refund, and throwing out DVDs.
    Chris_Clay
  • Thanks for the comments - however, I still can't help wondering just how typical this behaviour is.

    I'm interested in the people who run Windows day-to-day, the ones who aren't interested in the technology, the ones who don't know or care what an operating system is or what it does - or why - the ones who are also unlikely to be reading this but who, if they did, might saying: "I run Windows and it works for me because it runs the software I need for my work, my gaming, or my whatever."

    Are those people throwing away Windows disks? Most don't have a Linux guru in their back pocket, so it's a risky thing to do, not just from their financial point of view but also the configuration issue - the fear of messing up their computer and never getting it back again.

    Let's get real.
    Manek Dubash
  • Manek : I agree with you that the average Windows user that is happy with Windows, will surely keep their media. And they will probably continue to purchase new PCs with Windows and stay on that path. It's all really a matter of education; Most Windows users know Windows, and don't want to look at anything else or change from what they have. Then you have another group that is curious (which is probably mostly techies of some sort) and like to experiment with other operating systems, and also might know that there are better alternatives out there than Windows. Those in this group are ones more likely to go down the Linux path and at least try it out. If they are successful in migrating over (like many have), then what is the reason to continue to buy Windows? Linux has a huge array of software that all comes with the distribution. Upgrades are simplified and can be done in place. Linux users that are happy with it, have no reason to look at Windows and therefore don't need the media. In some cases too, when requesting the Windows Tax refund, the vendor will want the discs returned (had this happen myself). Dell shipped me a prepaid label and I immediately dropped them in the mail.
    Chris_Clay