Netbooks Set for a Breakout Year?

Smartphones got most of the attention of IT buyers interested in mobile devices last year, but it also proved to be a positive year for netbooks as well, with 2009 the first full year that the new class of mobile computers had been broadly available.

Early last year, ABI Research predicted that some 35 million netbooks would ship in 2009. But netbooks actually sold a bit better than ABI's forecast: About 36.3 million netbooks shipped in 2009, according to figures released by the research firm this week.

As for this year, ABI's forecast is bullish despite the impact of Apple's (NASDAQ: AAPL) iPad and a new generation of tablet devices that many observers expect to eat away at netbook sales. For 2010, ABI forecasts netbook shipments to reach 58 million, while tablets remain a far smaller market.

"Apple's claimed shipments of one million iPads in the first month are impressive starting from zero," Jeff Orr, principal analyst at ABI Research, said in a statement. "But even our total media tablet forecast falls far short of what anyone would call mass-market adoption."

Yet as a result of persistent interest in tablets, ABI Research expects the pace of netbook market growth to slow to a compound annual growth rate of 23 percent as media tablet sales pick up.

Meanwhile, ABI expects the netbook segment to fragment along different value propositions.

"Functionality will be added to mainstream netbook products while at the same time an entry-level netbook solution will grow, with the aim of targeting some large emerging markets (including China and India) where PC penetration is still quite low," Orr said.

That prediction follows the plans of several major hardware vendors. A new generation of "Pro" netbooks is expected to be introduced later this summer and early fall based on a Google-led push for bigger screens, fast (less than 10 seconds) startup time, and Web-based applications based on the search giant's Chrome operating system.

Apple CEO Steve Jobs has been dismissive of netbooks as a cheaper class of laptop computer that don't provide anything notably new in terms of features or value. Google and its hardware partners could change that perception if the Pro netbooks deliver on their promise of fast start times and ready access to a broad range of Web-based applications and services.

At the same time, Apple appears to have revived what has been a sleepy market for computer tablets, long focused on niches, and expanding it to a broader market for consuming all sort of media, including images, videos and traditional newspaper and magazine content in a portable device.

Apple could take significant early market share, but ABI said there are lots of opportunities for other vendors in this rapidly emerging field.

David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals.