Tuesday, July 14, 2009

3G netbook market growing at rapid pace, iSuppli says

Market researchers continue to believe that the netbook category will be posting significant shipment growth. iSuppli said that 3G netbooks shipments alone will top 17 million this year. Good news for Google and its Chrome OS, cloud applications and its investment in WiMax company Clearwire?

Most netbooks aren’t quite real netbooks yet. Our impression of a netbook today is a compact mobile computer with very limited hardware horsepower that is enough to browse the Internet and various content types. However, overall wireless connectivity is still limited and somehow stuck in the early 2000s. That may change soon as “always-on” Internet connections in netbooks will be more and more common over the next few years.

iSuppli said that 3G netbook shipments, netbooks with integrated wireless broadband access, will hit 17.8 million units this year, up from 10.3 million in 2008 and up from 443,000 in 2007. By 2012, the number is estimated to top 36.2 million. Windows dominates this space with its XP operating system at this time and is expected to capture the majority of the market with Windows 7. But there is also Google, which aims its Linux-based Chrome OS at the netbook market as well and even if no Linux version has been able to make a visible impact on the netbook market, it seems that the netbook market volume is enough for Google to take a shot at it.

iSuppli believes that it will be critical for Google, to promote and position its brand so that non-tech-savvy consumers will be comfortable buying a netbook running its operating system rather than one from Microsoft.

“The small penetration of Linux in netbooks is not due to any technical shortcomings,” iSuppli analyst Matthew Wilkins said. “Rather, the OS has suffered from the fact that there is not one Linux brand name that is capable of taking on the strength of the Microsoft trademark in the PC market. Because the vast majority of people who buy netbooks are consumers, who do not have a high degree of knowledge of the key players in the OS market, they are going with the names that they know. And in PCs, that name is Microsoft.”

To succeed, “Google must counter the high visibility of the Microsoft brand name on countless products in retail outlets, ranging from software, to PCs, to peripherals,” iSuppli said. It will also have to establish OEM deals that place its Chrome OS name on the netbooks as they ship from OEMs’ factories.

“If this does not happen with sufficient critical mass, then the OS will be left at the mercy of digital distribution, requiring that users download and install some client software on their own,” Wilkins said. “This is a procedure at considerable odds with the basic PC knowledge of the typical netbook user.”

But clearly, Google has a major interest in 3G netbooks to become a successful product category in order to support its own web applications. And we should not forget that Google has purchased a substantial stake in WiMax company Clearwire and it will be interesting to see how Google will push this technology in the coming months and years.

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