According to Intel, First Time Users Aren't Driving Netbook Sales

Fresh guidance from Intel suggests that while the netbook market is booming worldwide, first time computer buyers aren't driving the market. The company's statements reflect a significantly different understanding of the role netbooks are playing in the market than what Intel first envisioned. Originally, the Classmate PC, like the OLPC XO that preceded it, were intended explicitly for the developing world. In reality, however, netbooks are playing a supplementary role, even in markets where PC penetration is relatively low. "I don't think first-time buyers are going to buy netbooks," Intel executive vice president Sean Maloney said at a media event organized by the company. "The first time you buy something you want the real deal. It's consistent not just in China, but all around the world. If you're going to spend your hard-earned money for the first time, you're going to put a computer in your house."



Maloney's statements are undoubtedly colored by the fact that Intel wants first-time computer users to buy a "real" computer; the CPU manufacturer's gross margin on Atom products may be the same as its margin on desktop and mobile offerings in percentage terms, but the amount of real dollar revenue Intel receives per Atom sold is obviously much smaller. If anything, Maloney's statement seems too narrowly constructed. It's not hard to believe that the BRIC countries—Brazil, Russia, India, and China—are opting for full-powered systems as first purchases instead of netbooks, but there are hundreds of millions of people in less developed nations who will still want to get online as the capability is built out. Intel's own plans for Atom extend downward into MIDs (Mobile Internet Devices—the iPhone is probably the best example of a proto-MID device) and even cell phones. Longer term, there's no reason to expect that the developing world will follow the same adoption trends as the developed nations.

Given the expanding capabilities of cell phones (again, an area Intel has made noises about entering) and the increasing prevalence of cellular networks, it's downright likely that the first "real" computing device a number of future Internet users will own may be a mobile phone. With the netbook market only a year old, it seems premature to declare it established and set in stone.


Via:  Reuters
Show comments blog comments powered by Disqus