Consumer Notebooks Dominate PC Market, Growing Despite Economy

Consumer notebooks and netbooks are showing strong growth, despite contractions in all other areas of the PC market, according to a new report from IDC. Fujitsu and Toshiba recently joined the popular netbook space, which is already occupied by HP, Dell, Asus, Acer and Lenovo, among others.

The consumer notebook market continues to grow, despite an economic recession and shrinking shipments in other areas of the PC market, states a new report from IDC.

The researcher reports that three out of four computers that shipped to the U.S. consumer market during the second half of 2009 were notebooks, and that of the four major PC markets-consumer portables, consumer desktops, commercial portables and commercial desktops-only consumer portables saw positive growth during the quarter.

IDC preliminary data shows that the U.S. PC market, which includes desktops and laptops, contracted by 1.4 percent, which was a stronger performance than anticipated; early projections were for a loss of 3.1 percent. Saving it from reaching that low, states IDC, was the consumer notebook market. While commercial notebook and desktop shipments fell by 25 percent, and consumer desktops fell by 9 percent, consumer notebook shipments grew by approximately 63 percent, reaching a high of more than 6.3 million units.

That such growth should occur during a time of economic belt-tightening for consumers IDC chalks up to four factors. The first, it writes, is that notebooks are "must haves" for consumers, who justify the purchase, since it meets overlapping needs for entertainment, communication and productivity.

The second factor is pricing, which continues to fall. "An environment of eroding prices has been made possible by continued improvements in manufacturing capabilities, a reduction in component prices, and tight competition among vendors," writes IDC, noting that sub-$600 price points have become common.

The third factor driving this space is the proliferation of netbooks and mininotebooks, which are still more affordable, and fourth is the role of telecom carriers, which have begun to apply smartphone financing strategies to netbooks, offering them at subsidized rates. In the United States, AT&T and Verizon have been particularly quick to expand these aspects of their portfolios, with AT&T offering netbooks for as low as $49.99.

The share of notebooks within total PC shipments is now 58.9 percent, and within the consumer market it's 74.6 percent, up from 62 percent a year earlier. These numbers, states IDC, relegate desktops to the status of a niche market.

"With this type of performance, vendors will have to focus their attention on consumer segmentation and understanding user behavior so as to design products that meet the needs of specific demographics," said David Daoud, a research manger with IDC, in a statement.

"Vendors will also have to articulate more compelling strategies to market accessories, peripherals, software, and other products and services that enhance the consumer experience."

Fujitsu and Toshiba are among the more recent additions to the expanding netbook market, which is already occupied by Hewlett-Packard, Dell, Asus, Acer and Lenovo, among others.