Netbooks not 'slated' for death knell

Slates such as Apple's iPad won't affect netbook sales, as former are single-use luxury items catering to a niche consumer group, industry watchers say.
Written by Kevin Kwang, Contributor

Slates have been generating much buzz since January, when several computer makers such as Dell and HP unveiled prototype models of their touchscreen devices at the annual Consumer Electronics Show (CES), mere weeks before the introduction of Apple's iPad.

However, industry watchers such as Wang Gang, Lenovo's executive director and head of Asean consumer sales, told ZDNet Asia in an e-mail interview that slates will not eat into the sales of netbooks. Slates are a sub-set of the tablet computing category comprising also convertible tablet notebooks, and are multitouch-optimized.

While such devices have lots of "cool factors", they are still "luxury, single-purpose devices" for consuming online content, noted Wang. And they quickly become too costly once people add a keyboard, mouse and other peripherals. Apple's iPad, for instance, will have a starting retail price of US$499, excluding other peripherals.

"For many, [the iPad's] reduced functionality is a step back. You cannot give up a PC and use this device exclusively. Even the least expensive netbook has more capability than such devices," he said.

This view was echoed by Sameer Bhatnagar, a research analyst at Springboard Research. In an e-mail, he said that in terms of pricing, netbooks will be a better option for CIOs or CFOs to purchase for their employees in the enterprise space. As for the consumer sector, having taken into account pricing, energy efficiency and portability factors, "netbooks stand out as a better choice", he added.

He also added that with the recent news of Intel launching its new Atom processors that feature integrated graphics built directly into the CPU (central processing unit), the market can expect more energy-efficient netbook designs that deliver improved performance.

"So, in the short-term at least, we can expect the netbook market to way outperform the growth in the tablet PC segment," said Bhatnagar.

Slates companion, not replacement
As for whether the iPad or other similar multitouch devices are new to the market, Reuben Tan, IDC's Asia-Pacific senior manager of personal systems research, thinks not.

"The tablet form factor is nothing new," said Tan in a phone interview, "but the touch capability is causing resurgence in this particular device sector."

Tan mentioned that the only competition slates and netbooks will face is when "a consumer [with] some money, say US$400, to spare...is looking out for his second or third computing device".

Lenovo's Wang pointed out another demographic that might welcome slates: students. He said such portables will sell extremely well with this segment who consumes lots of content. However, he reiterated that this will not be at the expense of the traditional PC as the primary device.

Returning to the point of needing extra peripherals to do "real work", Wang said that slates will allow for limited content creation, but most of the work will continue to be done on netbooks and traditional PCs.

"This is a niche consumer product, not a game-changing educational device. E-books and content can also be read on traditional PCs and netbooks--a fact that is often overlooked," he said.

Speaking as a user, Dylan Lim, assistant vice president at an investment management firm, said that while slates like the iPad are "great for music and entertainment", he would still go for a netbook as he would be able to work as well as use it for leisure.

Ultimately, it really depends on what the consumer's needs are, said IDC's Tan. He pointed out that if people prefer a regular QWERTY keyboard experience for consuming online content, then a netbook is likely to be their choice. Conversely, if they are mobile and always on the move but need to be connected to the Internet, he reckons that iPad-like devices could prove a good fit for them.

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