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Mobile PC market gets busier

Posted: 13 Oct 2009     Print Version  Bookmark and Share

Keywords:mobile PC  netbook  smartbook  processor  3G 

Scan the products targeting the territory between laptops and mobile phones—e-books, mini-notebooks, mobile Internet devices, netbooks, smartbooks, smart phones, tablet PCs and tomorrow's cloudbooks—and you understand why consumers' heads are spinning.

They're not the only ones. Practiced market watchers admit to having been caught unaware by the netbook's popularity, for example, as consumers took to the products with an enthusiasm that even the leading PC companies failed to foresee.

Some of the product introductions represent truly new categories triggered by legitimate innovations; others boil down to distinctive marketing. Understanding the emerging products and the segments they target is critical for OEMs as they hone their designs, pricing schemes and marketing messages, but that's no easy task when the market is in flux.

Nokia is a case in point. The world's largest mobile handset vendor is coming at the market from opposing ends with two recent introductions: the PC-like Booklet 3G netbook, running Windows 7 and Intel's 1.6GHz Atom Z530, and the N900, a smart phone-like smartbook running Nokia's own Maemo 5 on Texas Instruments' Omap 3.

But the company's market-straddling strategy looks like a misstep to Jim McGregor, chief technology strategist at In-Stat. Nokia's netbook pricing, for one, has been "clueless," McGregor said: The Booklet 3G comes in at more than Rs.3,905.23 crore ($800), whereas prevailing prices in the category range from Rs.1,464.46 crore to Rs.2,440.77 crore

($300 to $500).

Nokia hasn't been the only victim of the market's moving targets, nor will it likely be the last. As more companies in search of double-digit growth opportunities stake out turf, expect more new product categories to litter the landscape.

Lost MIDs?
In 2007, when Intel Corp. introduced a prototype "mobile Internet device," the concept of a multimedia-capable, always-on handheld with wireless Internet access captivated many, including Intel's competitors. Some predicted MIDs would topple the longstanding Wintel hegemony in PCs, with ARM battling Intel to become the CPU platform of choice for the new device category.

But that CPU fight never really escalated beyond a war of words. Microsoft, meanwhile, fended off Linux by aggressively cutting the price of Windows. And netbooks, not MIDs, became the next big thing, at prices so low that some analysts see them reshaping the fundamental economics of the PC business.

New players, including Asus and Micro Star International—virtually unknown to users just two years ago—are competing head-to-head with the likes of Samsung and Hewlett-Packard in the global netbook market, observed Will Strauss, president of Forward Concepts. "HP is not the No. 1 netbook company, although they are the No. 1 PC maker," Strauss said.

Consumers are snatching up Rs.1,464.46 crore ($300) netbooks as secondary machines to their mobile phones. They use the netbook's mobile Internet capability for updating Facebook pages, watching YouTube videos, surfing the Web and handling e-mail.

And while the PC market has long been driven by consumers' seemingly unquenchable desire for faster CPUs, bigger memory capacity and larger screens, in the netbook space consumers appear to be satisfied with "good enough." That's disturbing to incumbent computer companies accustomed to selling Rs.73,223.13 ($1,500) notebooks. Many ignored, or failed to see, the pent-up demand for cheaper, mobile PCs that could offer longer battery life and instant-on connectivity.

Jeff Orr, senior analyst at ABI Research, today acknowledges that he misread the market. "I saw the future in MID, while I put a question mark to netbooks." In 2008, according to ABI, the industry sold 1.50 crore netbooks, compared with some 30,000 MID units.

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