May 21 2010

Dell is Selling the “Appropriate” Number of Netbooks

Steve Felice, the President of Dell’s consumer and small and mid-size business unit, recently said that, “There’s been some over-exuberance on this product (netbooks) in the marketplace.  Some of our competitors have positioned [netbooks] as a replacement device and then you see feedback from customers that are disappointed when they gave up their notebook for a netbook and find that it’s not quite as fast or doesn’t have quite the same functionality.”

Unlike their competitors, Dell has not been a strong proponent of a netbook as a laptop replacement, and their foresight is right on target.  According to shipment figures reported by IDC this past April, there has been waning enthusiasm for netbooks in favor of higher-performance laptops.  Intel Atom‘s share of the market has fallen to 20 percent during the first quarter of 2010 from 24 percent during the previous quarter, despite the fact that the overall volume of processors shipped rose by 4.1 percent.

Stronger demand for laptop technology is a blessing for Dell.  The company’s first quarter revenue in 2010 rose 21 percent to $14.9 billion and profits rose 52 percent to $441 million.  Dell did especially well in emerging markets like China and Brazil, where revenue rose 90 and 81 percent, respectively.  Felice says, “We are very pleased with the overall performance of Dell.”

Via PCWorld.

2 Comments on this post

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  1. About 30% of Netbook Shoppers Go For iPad | NetbookBoards.com wrote:

    […] have been steadily doing better with sales since their introduction, yet data gathered by Retrevo.com reveals a dark cloud looming over the […]

    May 25th, 2010 at 10:33 pm
  1. MleB said:

    I don’t think that it was ever the intent of the original netbook to be a replacement for a full-sized (and powered) notebook. Their initial appeal was their price, size, relative robustness and weight. But people found, often to their surprise (and certainly to ASUS with their original EeePC) that a significant amount of day-to-day computing could be achieved with them, too.

    Its hardly surprising that the ‘traditional’ notebook makers would prefer netbooks to simply go away – they’ve pushed the prices of their full-sized devices down in price – and yet they’ve been all too ready to join the bandwagon and put out netbooks (often with mixed success) of their own.

    If netbook sales are waning, its hardly surprising. The aforementioned price drop of notebooks have encouraged some to go that route, while millions of netbooks have been sold in a little over 2.5 years – all with more more-or-less the same specs. Users hardly need to ‘upgrade’ to a new netbook.

    But Dell et al and their lack of enthusiasm for netbooks is hardly credible. If they really wanted to kill off an unprofitable computing platform that has a limited shelf life and a plunging user base, they would have stopped producing desktop computers…

    May 22nd, 2010 at 6:49 am

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