Ed Moltzen

The Chart

October 16, 2008

DisplaySearch, the research organization based in Austin, Texas, just sent out a note regarding its new forward-looking study on the notebook space:

Despite the dismal outlook of many industries, DisplaySearch expects the notebook PC market to remain strong through the rest of 2008 and well into 2009. In its latest Quarterly Notebook PC Shipment and Forecast Report, DisplaySearch analyses how the trend towards desktop PC replacement with notebook PCs and the surging popularity of Mini-Note PCs (also known as netbooks) are expected to propel the market for all such portable computing devices to 23 percent Q/Q and 38 percent Y/Y growth rates in Q3'08. The fourth quarter is also expected to be strong, with forecasted growth of 19% Q/Q and 44% Y/Y. The combined market for these two product categories is expected to be more than 153 million units in 2008.

The outlook seems to jibe, in part, with Intel's earnings announcement this week in which the chip giant met expectations and executives said netbook sales so far have been incremental to notebook sales. But not even Intel executives would go out on a limb to predict that sort of growth.

That DisplaySearch can even suggest, despite the gloom and doom and talk of a recession, that the industry is still on track for 44 percent, year-over-year growth in mobile PCs for the full year may raise some eyebrows.

And it's not as if analysts can say that even if the U.S. is in a down economy, another geography will be strong. Economists (not to mention the worldwide stock markets) have been pointing to signs of a major global slowdown.

Luckily, chipmakers and OEMs have spent the past 18 months flooding the market with innovation, better performance, better energy efficiency and better pricing. In a down economy, good, old-fashioned quality and value may be the driver that keeps this segment of IT relatively strong while other industries are in trouble.