Although PC sales have slowed drastically in the last three quarters, sales of the netbook PC have done just the opposite since the middle of 2008. These miniature notebooks -- which don't have the same capabilities as normal notebooks -- have shot up in sales and continue to ramp up at an impressive rate.In fact, netbook shipments worldwide accounted for 20% of all notebook PC shipments in the first quarter of the year, with Taiwan's Acer taking the lion's share of sales at over 30% market share. Fellow Taiwanese competitor Asus was a distant second, shipping only half the netbook PCs as Acer. U.S. competitors Hewlett-Packard Corp. (NYSE: HPQ) and Dell, Inc. (NASDAQ: DELL) lagged behind, although HP shipped more actual notebook PCs than any other company at 7.3 million units.
Curiously though, Intel Corp. (NASDAQ: INTC) reported that 30% of all netbook sales in 2008 were returned by their purchasers. Intel, which furnishes almost all the chips used in virtually every netbook PC, could be highlighting what some fear -- that Netbook PCs are a fad. If customers expect the capabilities of a normal notebook in a netbook (and are disappointed), that could explain the high return rates.
If netbooks are selling more in the EMEA region as portable internet devices rather than notebooks with false expectations, that goes against the "return" grain. Manufacturers are clinging to any kind of category growth (even with non-existent margins), and netbooks are providing that -- even in a recession. But a 30% return rate? That's a swift but silent killer, and it took the world's largest chipmaker to point that out.
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