Netbook market may have already peaked

IDC figures show a decline in Atom processor shipments as a percentage of Intel mobile processors

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
Brooke Crothers
2 min read

IDC will release figures later this week that indicate that the Netbook phenomenon may have peaked, and recent comments from Intel itself back this up.

HP Mini 210: Netbooks may have peaked last year. Hewlett-Packard

The figures from market researcher IDC show a decline in Atom processor shipments as a percentage of Intel mobile processors--a sharp reversal of previous trends that had the Atom chip, quarter by quarter, taking a larger percentage of mobile chip shipments.

Intel ships most of its Atom processors to makers of Netbooks--small, highly portable laptops that are typically priced around $350. Major Netbook brands include Hewlett-Packard, Dell, Asus, Acer, and Toshiba.

"Atom in Netbooks is plateauing," Shane Rau, an analyst at IDC, said in a phone interview. "With the market recovery, I think end users are going to be looking for more value than just low-cost devices. This is an opportunity for higher-end mobile PCs, for example, that have better performance, bigger screens, bigger hard drives," he said.

Competition from Netbooks that use processors from United Kingdom-based ARM--commonly referred to as "smartbooks"--and tablets, such as the iPad, will also be a factor in the Atom-based Netbook slowdown, Rau said.

In the first quarter of this year, Atom processors as a percentage of Intel mobile processors fell to 20.3 percent, compared with 24.3 percent in the fourth quarter of last year and 23.5 percent in the third quarter, according to Rau, citing figures to be published later this week. "Pretty much all of last year, it was in the 23, 24, 25 percent range. So, 20 percent coming into Q1--that's a noticeable change," he said.

And Intel doesn't seem to disagree. In an Intel earnings conference call earlier this month, CEO Paul Otellini said this: "I think we suggested that Netbooks seem to be settling out at about 20 percent of the mobile form factors and on an annual basis that looks to be about right," he said.

Other comments from Otellini support the IDC figures. "In Q1...Atom was down a bit more than what we would normally see as seasonal," he said, adding that there is "no corporate Netbook market we have found."