Netbooks eroding Intel's lucrative notebook market, says The Information Network

Netbook manufacturers are adding bells and whistles to their products that are blurring the lines between a netbook and a notebook, but the problem is the netbook market is migrating upward, according to The Information Network. The segment is now becoming characterized by low-end notebooks with a small screen but selling for a few hundred dollars less, yet it is still a few hundred dollars more than the original intention of what a netbook was supposed to be. Will there soon be no meaningful difference between netbooks and lower-end, consumer laptops besides weight and Atom chips?, The Information Network asks.

The Information Network is cautious about its forecast for 21.5 million netbooks sold this year as a percentage of those shipments will probably be better categorized in the 177.7 million unit notebook market. The market research firm said it is seeing a blurring of lines between a netbook and a notebook and it further envisions netbooks on the market with multimedia capabilities for watching streaming video and DVDs. Asustek Computer is already marketing a netbook with a DVD.

"Intel probably hates the situation because they are earning practically nothing for their Atom chip, which is eroding their lucrative notebook market. Microsoft gets smaller licensing fees as well," noted Dr Robert N Castellano, president of The Information Network. "The only real winner will be Asustek, who is trying to build market share in the notebook space."