Netbooks Selling Even Better Then Projected

Netbooks may already be selling like hotcakes, but they’re showing much greater strength than some earlier predictions, according to new findings from retail analyst firm NPD Group’s DisplaySearch unit.

The company expects shipments netbooks to reach almost 33 million units in 2009 as penetration of these products into the notebook PC market grows to 20 percent worldwide. At the same time, DisplaySearch expects the market for “traditional” notebooks to be flat year-over-year for the first time.

More importantly, netbooks are finally starting to take off in the emerging markets they were originally aimed at. These low-cost devices were expected to bring cheaper computing to poorer parts of the world, but instead, the netbook became popular in established, richer markets as a second or third PC for many people.

That’s finally changing. Netbook penetration will exceed 26 percent in Latin America and 22 percent in EMEA (Europe, the Middle East, and Africa).

“Part of the problem early on was the whole Linux vs. Windows XP thing, and there was the high return rates of Linux machines. That was part of the challenge. But now that that’s settled, netbooks are starting to extend into emerging markets,” John Jacobs, director of notebook market research and author of the report told InternetNews.com.

DisplaySearch’s research indicates that netbooks, at least in established markets, are predominantly used as secondary PCs by consumers, and are not replacing notebooks. As such, Jacobs doesn’t see it going any higher as a percent of sales. “If it sticks to its roots as a secondary device, then by nature it is secondary,” he said.

Asia-Pacific, China and North America still continue to lag as far as growth goes, with the Japanese market expected to shrink by 13 percent this year, DisplaySearch also found.

Jacobs also said he doubts Android, the free open source operating system from Google (NASDAQ: GOOG) for smart phones, will make much difference if it finds its way onto netbooks — especially if it’s too incompatible with Windows systems.

“The question that I always come down to is, if you put Android on this box, how does it sync and talk to your other systems?” he said. “It’s one thing to have a smart phone with Android that basically is a device in and of itself. But if you’re using this as a backup device and it doesn’t see your files like everyone else, that becomes a challenge.”

The other problem it has against Windows XP is momentum. “What does it take to create an international brand? Lots and lots of advertising dollars,” said Jacobs. “Who is going to spend the money to make Android a worldwide brand, Google or the hardware vendors?

And despite recent efforts by wireless carriers like Verizon — who have begun selling subsidized netbooks as part of a high-speed wireless plan — the mobile phone companies aren’t a good way for netbooks to get out there, either, he said.

“In North America, I don’t think so. Those models have done well in Western Europe and parts of Asia. The reason they’ve done well is because their data plans are half of what they got here,” he said. “Internet 3G connectivity is much better in terms of speed. It’s no great secret most folks in America are not enamored with their cell phone provider.”