Channel Vendors Expand Netbook Strategies

Is the rise in netbook popularity a passing fad or a bonafide trend? After buying one, Managing Editor Al Senia becomes a convert.

January 13, 2009

Al Senia

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Even though some channel hardware vendors are starting to feel the pressure of the deteriorating economy, those small sub-notebooks known as netbook continue to be one of the bright spots in industry sales. There's been some skepticism about whether the netbook phenomenon will last or wind up being only a passing fad.

My vote is with the believers, but maybe that's because I broke down and purchased one myself during the holidays. After examining the various offerings from channel vendors like Hewlett-Packard, Acer, Dell and Asus, I decided on an Acer Aspire One with a 160Gb hard drive (a bigger drive than is on my current desktop and notebook, by the way.) For $350, I am now the proud owner of a fully functioning XP system that runs all my current software flawlessly and weighs in at less than two pounds.

With an 8-inch screen, this surely isn't the system I am going to use as my primary computer, but it's a great supplement. And it sure beats lugging a laptop around to trade shows or the local Barnes & Noble. Other pluses: The footprint is small enough to easily use on a cramped airplane, and the battery lasts for about six hours, enough for even a cross-country flight. The main downside is that there is no CD or DVD drive on this or other netbook.

I'm clearly not the only one with a case of netbook fever. The little computers were a hot commodity at CES, where Asus, HP, Dell and others introduced new models. Smaller, faster chips that improve on the Atom processor are anticipated later this year, which should give another boost to the market and push down price points. All of this is creating momentum for the netbooks, but industry analysts are divided about their staying power versus traditional laptops.

Right now, the trend is swinging against the skeptics. Amazon reports that eight of its 10 best-selling notebooks between Thanksgiving and Christmas were netbooks. Retailers like Best Buy, Circuit City and Frys Electronics have been hyping them throughout the holiday season.

Personally, I think the netbook makes up in convenience what it lacks in processing power. It's a helpful add-on for mobile workers. Netbooks offer a lot more value that Web-surfing devices like the Apple iTouch. Computer buyers are a lot more cost-conscious in this recession, and the netbook gets the edge there, too. Channel vendors are worried, of course, that they will hurt sales of existing, more expensive, margin-rich notebooks.

However, I doubt that. A netbook won't replace a fully featured laptop, but it does complement it nicely. And some vendors are able to use bundling strategies as a way to boost sales effectively. For example, Dell has just introduced a new netbook and lowered the price of its older model to $99, but only if buyers sign up for a two-year AT&T data plan that provides mobile Internet access. Channel distributors say bundling such data plans with netbooks and notebooks are emerging as a viable revenue play in the mobile computer space for resellers.

The fact is, times are lean and channel vendors and partners should capitalize on any opportunities that emerge. Netbooks are clearly one of those. They've carved out a new piece of the computer market. Instead of worrying about whether the trend will last, channel partners should jump on the trend.

(Al Senia is Managing Editor of ITChannelPlanet.com.)

TAGS: Dell,netbooks,HP,CES,Acer

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