China’s Netbook Market Gears Up
iSuppli Corp. expects that China’s domestic netbook market will expand to 2.6 million units in 2009, up by a factor of five from 2008. Although the annual growth rate is impressive, the market size is still quite small compared to China’s 16.5 million unit notebook market. However, the global netbook market is gaining momentum and is expected to top 26 million units in 2009.
Chinese consumers’ enthusiasm for this low-cost 10-inch LCD display notebook is quite strong. Currently, most netbook
consumers are young women and students who are buying their first mobile PC.
Besides the low price, these consumers are attracted by some of the other features of netbooks, such as their long standby times and small form factors. Furthermore, the netbook PC also is conceived as a secondary mobile PC for business people, although this kind of usage hasn’t really taken off in China yet.
Getting Competitive
Many Chinese notebook PC OEMs believe that the netbook market will present a new opportunity to compete overseas. These relatively small OEMs cannot compete with the major established players such as Hewlett-Packard Co. in the traditional notebook market. But by concentrating on netbooks, they have gained a foothold. However, international notebook OEMs have become aware of the strong growth potential of the netbook market in China
and have introduced their own models.
However, iSuppli does not expect these Chinese notebook OEMs to become more competitive in the netbook space. Their only edge is a lower operational cost. The cost of their products can’t be competitive because they depend on Taiwanese Original Design Manufacturers (ODMs), the same as international OEMs.
iSuppli does not believe they will get a better price for Intel Corp.’s Atom microprocessor. Furthermore, their branding and design capability is weak compared to that of the major players.
Seeing White
Meanwhile, local design houses expect to be successful in the emerging netbook segment, as they have been in China’s handset market. Still, iSuppli believes that their success will greatly depend on the development of the white-box netbook market.
Local system integrators will be the major suppliers of white-box netbooks. They have a very strong channel not only in China, but also in many developing countries. Furthermore, they believe that netbooks will be very competitive products because they are designed to compete with traditional notebooks.
China’s white-box netbook market is gearing up. System integrators are shipping netbooks in China and
worldwide. Many design houses already are developing netbook platforms.
So far, the most reputable design house participating in this segment is Shenzhen C&C Technology Co. Ltd. The company offers products based on Intel’s Atom and VIA’s C7-M microprocessors. Even local handset design houses began to develop netbooks because the handset market is overly competitive.
Desiring Consumers
End-market demand for netbooks is strengthening due to the decrease in selling prices. Consumers have a very strong desire for mobile PCs to surf the Internet, chat and view entertainment. If a netbook has a larger screen, such as a 12 or 13 inches, it will quickly grab market share from notebooks, especially in the developing countries.
It’s critical for netbooks to have low cost, low power consumption and stability in the supply chain. If there is only one supplier of components, the white-box netbook market will have no future.
The good news is that the market has another Taiwanese semiconductor fabless company, VIA Technologies Inc., that is providing netbook silicon solutions. VIA is trying to consolidate the supply chain to offer a turnkey solution for netbooks, the same way MediaTek did in the white-box handset market. However, a turnkey solution for netbooks is harder to develop. Once that is done, China’s white-box market will move into higher gear.
Chinese consumers’ enthusiasm for this low-cost 10-inch LCD display notebook is quite strong. Currently, most netbook
consumers are young women and students who are buying their first mobile PC.
Besides the low price, these consumers are attracted by some of the other features of netbooks, such as their long standby times and small form factors. Furthermore, the netbook PC also is conceived as a secondary mobile PC for business people, although this kind of usage hasn’t really taken off in China yet.
Getting Competitive
Many Chinese notebook PC OEMs believe that the netbook market will present a new opportunity to compete overseas. These relatively small OEMs cannot compete with the major established players such as Hewlett-Packard Co. in the traditional notebook market. But by concentrating on netbooks, they have gained a foothold. However, international notebook OEMs have become aware of the strong growth potential of the netbook market in China
and have introduced their own models.
However, iSuppli does not expect these Chinese notebook OEMs to become more competitive in the netbook space. Their only edge is a lower operational cost. The cost of their products can’t be competitive because they depend on Taiwanese Original Design Manufacturers (ODMs), the same as international OEMs.
iSuppli does not believe they will get a better price for Intel Corp.’s Atom microprocessor. Furthermore, their branding and design capability is weak compared to that of the major players.
Seeing White
Meanwhile, local design houses expect to be successful in the emerging netbook segment, as they have been in China’s handset market. Still, iSuppli believes that their success will greatly depend on the development of the white-box netbook market.
Local system integrators will be the major suppliers of white-box netbooks. They have a very strong channel not only in China, but also in many developing countries. Furthermore, they believe that netbooks will be very competitive products because they are designed to compete with traditional notebooks.
China’s white-box netbook market is gearing up. System integrators are shipping netbooks in China and
worldwide. Many design houses already are developing netbook platforms.
So far, the most reputable design house participating in this segment is Shenzhen C&C Technology Co. Ltd. The company offers products based on Intel’s Atom and VIA’s C7-M microprocessors. Even local handset design houses began to develop netbooks because the handset market is overly competitive.
Desiring Consumers
End-market demand for netbooks is strengthening due to the decrease in selling prices. Consumers have a very strong desire for mobile PCs to surf the Internet, chat and view entertainment. If a netbook has a larger screen, such as a 12 or 13 inches, it will quickly grab market share from notebooks, especially in the developing countries.
It’s critical for netbooks to have low cost, low power consumption and stability in the supply chain. If there is only one supplier of components, the white-box netbook market will have no future.
The good news is that the market has another Taiwanese semiconductor fabless company, VIA Technologies Inc., that is providing netbook silicon solutions. VIA is trying to consolidate the supply chain to offer a turnkey solution for netbooks, the same way MediaTek did in the white-box handset market. However, a turnkey solution for netbooks is harder to develop. Once that is done, China’s white-box market will move into higher gear.
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