Ultra low-cost laptops to remain niche

Products not set to change the market, according to IDC

Robert Jaques, vnunet.com 09 May 2008

Ultra low-cost notebook PCs will remain niche products despite recent hype, and will not become market "blockbusters", experts predict.

IDC believes that the devices will primarily find success as secondary mobile computing devices in established regions and in education markets.

"Consumers have embraced the idea of the PC, particularly the portable PC, as a personal device rather than a shared household device," said Bob O'Donnell, vice president for clients and displays at IDC.

"This has led to the introduction of notebooks in an increasingly wide range of sizes and shapes, as well as more specialised PCs.

"Very low-cost compact notebooks that can be carried around and provide quick and easy access to the internet via Wi-Fi hot spots fill an important spot in this burgeoning market. They are the first 'disposable' notebooks."

IDC argues that ultra low-cost notebooks make the most sense as secondary computing devices used primarily for online activities and carried around more often than "regular" notebook PCs.

"Despite its potential, the ultra low-cost notebook will not receive a universal embrace from consumers," said O'Donnell.

"The price gap with fully featured notebooks will be small and many consumers will opt to pay just a little more for a fully featured, full size notebook PC.

"And PC vendors, wary of the very small margins on these very small devices, will promote ultra low-cost notebooks as additive, not replacement, products and will still face challenges in making them a profitable business."

IDC forecasts worldwide shipments of ultra low-cost notebook PCs to grow from fewer than 500,000 units in 2007 to more than nine million in 2012.

But with low average selling prices, worldwide revenues will be less than $3bn in 2012.

As a percentage of the total consumer PC market, these devices will remain un der five per cent throughout the forecast period.

However, ultra low-cost notebooks could capture more than one third of the education market by 2012.

IDC's definition of an ultra low-cost notebook PC is a sub-$500 clamshell form factor mobile PC with a screen measuring from 7in to 10in diagonally, running a full operating system capable of supporting third-party applications, and possessing a keyboard and wireless broadband connectivity.

Examples include the Asus Eee PC and the One Laptop Per Child XO.

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