Netbooks Gain Ground In The Channel

Netbooks, or ultra mobile PCs (UMPCs), are defined by NPD as clamshell computers with screens 10.2 inches or less. Sales for the products increased 66 percent through distributors in the fourth calendar quarter of 2008, compared to the third quarter, said Stephen Baker, vice president of industry analysis at The NPD Group.

While much of that growth is likely due to typical sales seasonality, Baker said the increase is nonetheless impressive. "It's pretty hard to talk about growth for a segment that didn't really exist last year, but they did pretty well," he said.

Netbooks also accounted for 23 percent of all notebook sales in the fourth quarter through distributors, according to NPD. "From Q3 to Q4, netbooks had a huge impact on the segment," Baker said. It didn't hurt that the average selling price of netbooks fell $70 to $371 in the fourth quarter.

Jay Tipton, vice president of solution provider Technology Specialists, said he uses a Lenovo UMPC. "It's got 5 hours of battery life and I abuse the hell out of it," he said.

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The VAR said he's had success selling them into "medical and people on the go."

According to NPD, Acer and Asus combined for 75 percent of the netbook volume through distributors, in line with their market share through brick-and-mortar retailers, direct marketers and e-commerce sites, Baker said.

"Acer and Asus were the two guys who got on the bandwagon early, got product in and took some advantage there," he said.

Direct marketers saw netbook sales increase 50 percent in the fourth quarter from the third quarter, and accounted for 2.4 percent of direct marketers' overall notebook sales, according to NPD.

Brick and mortar retailers' netbook sales increased ninefold, according to Baker, and accounted for 6.6 percent of all notebooks sold by brick-and-mortar retailers. "At retail, we were pretty impressed at how well the product ramped up through the fourth quarter. Most of the sales through the fourth quarter were in December," Baker said.

Some distributors' sales overlapped with direct marketers, retailers or e-commerce sites that bought their products from distribution.

About 20 percent of all notebooks sold through e-commerce sites were netbooks, Baker said.

"It doesn't surprise me that an early adopter product would have a different profile through distributors before it starts to hit with DMRs," he said.

Meanwhile, market research company ABI Research estimates the number of worldwide netbook shipments will reach 35 million this year, rising to 139 million by 2013.

Smartphones raised the comfort level of mobile technology for users and the lightweight, medium-size form factor and moderate price points have struck a chord with users, according to Kevin Burden, practice director at ABI Research.

"Today, with a better understanding for what a smartphone is, is not, and may never be, along with a reality check on the usefulness of UMPCs, the market remains open for new device types," Burden said in a statement.