As I was counting the netbook articles on Liliputing this morning (2 on the first 2 pages of 18 headlines) I wondered again if the netbook market might be having more than just a summer break. The push to more powerful devices (and slightly higher prices) with the next-gen CPUs and platforms seems to me like it breaks everything that the netbook was. Its over and all that remains is the momentum of the tag (which of course will be carried forward by everyone that has invested in it.)

Sasha, my good friend and fellow MeetMobility podcaster is one of those that has a lot invested in the keyword so it’s interesting to read his thoughts on it. In an article today he highlights the advances that the new platforms will bring and assures us that everything is going to be fine. If you can wait until February, he says, you’re going to have a big selection of new devices to choose from.

I have a certain amount of my business effort invested in netbooks too. If the netbook hadn’t have arrived my company would have been dead a long time ago and, like the iPad, it makes people think and mobility, size and usability. I’m not so bullish on the future of netbooks though. There are a couple of data points I’m considering and a number of other thoughts.

Google Trends

Google trends is hardly the best indicator of sales but it does indicate popularity amount searches and popularity amongst news items. Netbooks are certainly taking second place to tablets in terms of news right now and it seems that the slow down in news is also affecting users awareness of the platform. That will have a direct impact on sales. Searches for ‘netbook’ are now running at less than one fifth of searches for Android or iPad. This time last year, Android and Netbook were attracting exactly the same level of search queries. Having said that, there are almost the same number of queries for netbook as there were one year ago. Only the number of news articles has fallen.

Number of Netbooks.

By analysing the German netbook market SKU numbers and the distribution of screen sizes over the last two years it can be clearly shown that the sub 10” market is long gone. The 10” market is flattening off in terms of new products and only the 11” segment is rising significantly. In this months analysis it’s also clear that the total numbers of products is flattening off which could be an indicator that growth has stopped in Germany. Again, the underlying trend is one of ‘flat’ rather than growth or decay. If this can be maintained, the netbook market will remain healthy but with new product launches sowing, it will be difficult to keep momentum. Of course, if devices are simply dropping the ‘netbook’ tag in their marketing then the devices may must be selling as ‘laptops’ although that in itself indicates that the netbook trend is over.

Based on simple screen sizes and weight figures, the traditional netbook market is already over for me.

This is the forth report on key trends in PCs below 12” screen size appearing in the German market through the popular price comparison engine, Geizhals.at . (Based on SKUs, not model families.) The last one was done in November 2009

In this report you’ll see the big jump in numbers coming from the new Pinetrail devices. Below the graphs I highlight some key numbers.

Number of SKUs in the market.

The big jump in numbers is clear to see from the top graph. Total numbers jumped by 115 with Pinetrail making up a large portion of that number. A bigger trend I’m seeing is the introduction of 1366×768 displays. Nearly all of the 101 devices with hi-res screens have appeared in 2010.

Other ‘trends’ that are clear from the data provided in the comparison engine:

• 78% of the devices are running on Intel Atom. Remember that the segment includes some devices running laptop-grade CPUs. This is not just an analysis of netbooks.
• The percentage of devices in the 10% segment dropped but the number of devices still rose.
• There were percentage increments in the 5”, 8”, 9” (iPad) segments. Previous reports showed decline in these segments.
• Only 5% of the devices are offered with Linux.
• There’s a 3:2 ratio of Glossy to Matt screens.
• Only 10% of the devices weigh 1KG or less.
• Very few Nvidia ION devices have reached the market. Only 3% include the ION option and all of these are ION V1. Devices with Pinetrail + ION are expected in the next snapshot so this number should increase.
• The cheapest device (based on lowest price offered) is still the Hercules E-Cafe EC800 is more expensive now – 183 Euros (up from 151) but the cheapest Intel Atom netbook isn’t far behind at only 188 Euros. (lowest price.)

One thing I note every time I do this is that there are a lot of end-of-life PCs still being offered. For example, the EeePC 701 is still hanging around. It’s difficult to measure but it looks like up to 100 of the devices in the market are remnants.

When we look again in June I expect we’ll see a much smaller increase in numbers. The first ION2 devices will appear though and if the ‘tablets’ and MIDs start flowing into the market as promised, we should see growth, albeit very small,  in the sub 1KG and sub 10” segments with a corresponding increase in non-Windows numbers.

This one has surprised me a little bit. I expect a certain type of MID to merge with the rising capabilities of smartphones but I didn’t expect 50% of people to agree that MIDs (ABI seems to point to big-screen devices that aren’t 24/7 devices) would be cell phone replacements. Have I been a bit short-sighted here? Are we getting to a point where a 4" or even 5" screen MID with voice capabilities would be acceptable as a smartphone by a significant number of people?

MIDs have been proposed by some as cell phone replacements. Does the public agree? In this survey, almost half did, lending support to models incorporating cellular voice, while 34% said they would continue to use a cellular handset.

“This is going to become a question for MID vendors and consumers alike,” says Philip Solis, principal analyst at ABI Research. “There will be little difference between a smartphone such as the Palm Pre which uses an OMAP 3 processor and a MID with cellular voice, except for screen size. Understanding of what consumers want from stand-alone MIDs without cellular voice will be important.”

The survey was done in the U.S. where, in my experience, there’s more acceptance, or even a demand for ever bigger mobile computing products and I know there are people reading UMPCPortal that are waiting for the all-in-one to appear. I may be underestimating this part of the market. Maybe ‘MID’ is the new ‘smartphone’? On the other hand, do the ‘public’ really know what a MID is?

ABI research press release.

I have no problem agreeing with what InStat are saying in their latest report. "Embedding a wide-area wireless modem into devices addresses the frustration many users have with the coverage of Wi-Fi." For me, wireless wan connectivity is an absolute must for a UMPC and anything without it is just portable between hotspots but I do also understand that there are problems for OEMs too. Adding 3G to a product requires more certification expense, assembly-line options, adds cost and is difficult to research on a global territory basis. This is why you see OEMs like Raon Digital offering base systems that resellers can tailor for their own customers. It’s also why Intel have a modular 3/4G option in their Menlow platform.

There are also people that aren’t quite as mobile as others using multiple WLAN locations as hot-desks or even working within a single hotspot area. Tethering and USB sticks also provide an option but as carriers get their backbones ready for this new class of netbook and UMPCs and as 3G USB stick margins drop, they will start demanding that devices come with 3G built in. If OEM’s want to get their devices into these potentially huge sales channels, they need to comply.

The InStat report also covers UMPC market predictions. Unfortunately there aren’t any hints as to what they think the market is worth and even what a UMPC or UMD is. For what it’s worth, I don’t think there’s going to be too much growth in the traditional UMPC market (productive, 6-8" screen, lightweight mobile computing hardware running desktop software) this year due to lower-cost netbook options and fairly static vertical markets and solutions but if you look at lower down in the market at 4-5" devices, there’s something starting to happen. Viliv, Raon, UMID, Fujitsu, Wibrain, Lluon and others are all in with new devices. Some may call them MIDs but when they running Windows and looking exactly like the Origami marketing dreams of 2006, you’ve got to consider them as UMPCs.

Report summary (PDF)

Via Center Daily

Japan’s population is about 128 million people so to say that one in 25 will buy a MID in 2012, just over 3 years away, seems a little surprising. Even more surprising is the prediction that, together with 18 million smartphone sales, the MID/Smartphone segment will form about 40% of the total handset market meaning MIDs would be 10% of the total handset market. However, the definition of a MID that has been used seems slightly off-mark and puts the average screen size at 3.5 inches. I could understand an average of 4" but 3.5"? Too small for 800×480? Cue Touch HD owners…

The concept of MID is defined in this report according to five conditions, which are Mobility, Always-On, Embedded 3G+, Display Size, and Full Browsing. This report emphasizes that in order to offer mobility while being differentiated from Fixed Wireless Access (FWA), MIDs have to be embedded with 3G+ cellular chip. When mobile WiMAX is vitalized, MID products that cover voice services based on VoIP and offer mobile broadband might hit the market.

Source: Research and Markets

Via TMCNet (Nov 20th)

In a recent ‘Thought Leaders’ study by Phil Hendrix of IMMR, a number of (US-based, I believe)people were asked the following question:

Three years from now, among individuals who own or use a PC, cellphone or smartphone, at home or work, what percentage do you think will have purchased a MID, again, by Q3 2011.

The average prediction is that by Q3 2011, 33% of these people will have a MID.

I know what you’re thinking. ‘No way.’ That’s what I thought until I read their definition of a MID. The IMMR definition of a MID is:

MIDs, or Mobile Internet Devices, are a new class of devices/PC’s that offer many of the features of a PC, but at 1-3lbs. are lightweight and portable enough to easily carry and use virtually anyplace, at any time.

Its not the definition that Intel use but its certainly the definition I’m hearing from ARM, Ti and others that regard even netbooks as mobile Internet devices. Based on that definition, I totally agree with the ‘Thought Leaders,’ whoever they may be.

A complimentary copy of the report, titled ‘The M in MIDs stands for Mobile’ and sponsored by GigaOM,  the GSMA mobile Innovation Market and InMobile, can be downloaded from the IMMR website at www.immr.org and it’s an interesting read covering more than just the penetration question. There are some quotes from the respondents included too like these two that I hear a lot: “Someone who has an iPhone right now, essentially has a MID already” and “With smartphones taking on 80%+ of MID-type activities, it will be tough to convince people to carry yet another device.”  So if the iPhone is a MID and more voice-enabled MIDs are on the horizon, what are we arguing about? Based on this segment of the market alone I’d say we will reach 30% penetration by end of 2011. Add netbooks into the mix and it’s almost a certainty but for me, the even nicer thought is imagining the hundreds of variations of mobile Internet-enabled devices that will appear.

Related article: MID, a definition that is hard to ignore.