Chinese netbook makers abandon smaller models

Taipei, Taiwan – China’s netbook PC industry is overwhelmingly switching to 10-inch products, according to the Market Intelligence & Consulting Institute (MIC).

As users lost interest in smaller models during the first quarter of 2009, shipment of seven-inch and 8.9-inch netbook PCs fell rapidly, and stocks stagnated on the shelves. This meant that shipment volume of the Greater Chinese netbook PC industry declined by 11.8 percent in the first quarter of 2009 to 4.61 million units. On a year-on-year basis, though, shipments grew significantly.

According to MIC Industry Analyst Ya Wei Ku, “In the fourth quarter of 2008, 8.9-inch models were still the mainstream in netbook PC shipment. In the first quarter of 2009, however, 10-inch models quickly became the market leaders.”

Brands such as Acer are also rolling out 11.6-inch products, hoping to expand the original netbook market segment. Acer, Dell and others launched 10-inch products in the first quarter of 2009, and MIC says production for their 8.9-inch products will be gradually reduced or even halted. As a result, 10-inch products accounted for about 70 percent of the Greater Chinese industry’s total shipment volume in the first quarter.

Right from the start, Europe has been the main market for netbooks. Both Asus and Acer focus on the region. Coverage of mobile broadband networks is high in Europe, and bundled promotions in cooperation with telecom operators are popular, stimulating shipment volume. Also, the ratio of the population using the internet in Europe is higher than in other areas.

“However, Western Europe has been heavily affected by the global financial crisis, and starting at the end of 2008 market demand became weak”, said Ku. “In North America, major operators AT&T and Verizon started to promote bundled sales of mobile broadband and netbook PCs, while the North American retail market did not decline as much as was originally forecasted. As a result, the industry’s shipment share for North America increased slightly.”

The Chinese market, which initially lacked interest in netbooks, has started to expand. A rural home appliance subsidy program and the issuance of 3G licenses are expected to spur more sales.