China’s Netbook Problem

Q1 2009 was a rough time for the Chinese netbook market. Seven-inch and 8.9-inch netbooks, which were responsible for early booms in the industry, inexplicably showed plummeting sales in China. An 11.8% drop in netbook shipments brought figures to a mere 4.61 million units, though year-over-year the industry grew. Why?

MIC Industry Analyst Ya Wei Ku thinks the answer has to do with a point of much contention in the netbook industry – screen size.

“In the fourth quarter of 2008, 8.9-inch models were still the mainstream in netbook PC shipment. In the first quarter of 2009, however, 10-inch models quickly became the market leaders.”

The trend has already been seen with brands like ASUS, which dropped its 7-inch Eee PC in favor of the 10-inch version, and Acer which has recently focused on 11.6-inch netbooks. MIC says 8.9-inch netbook production will be miniscule in the coming months; 70 percent of the Chinese market was accounted for by 10-inch netbooks first quarter.

What else is new for Chinese netbook markets? Ku says that, while Europe was a major market for Chinese manufacturers in 2008, economic crisis has shifted ’s focus to North America.

“However, Western Europe has been heavily affected by the global financial crisis, and starting at the end of 2008 market demand became weak… In North America, major operators AT&T and Verizon started to promote bundled sales of mobile broadband and netbook PCs, while the North American retail market did not decline as much as was originally forecasted. As a result, the industry’s shipment share for North America increased slightly.”

Netbook sales are still growing in China, where responses were initially lukewarm. It’s likely that an upcoming rural home appliance subsidy program could stimulate the market further, and the distribution of 3G licenses could help as well.

Via TGDaily.

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