Report: Netbooks Outsell iPhones

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(Credit: steve-chippy/Flickr)

Netbooks outsold iPhones in the third quarter of this year, according to two recent reports. Netbooks, inexpensive laptops with a smaller footprint, sold 5.6 million units versus 4.7 million of Apple’s touchscreen handsets.

The netbook category grew 160 percent in the third quarter compared to 2007, according to DisplaySearch. Experts predict 14 million netbooks will ship by the end of 2008, boosting notebook PCs along the way.

“With the lone exception of Apple, all of the top 10 PC brands have entered the mini-note PC market, John Jacobs, DisplaySearch Director of Notebook Market Research said earlier this week.


For some time, Apple CEO Steve Jobs has wavered on whether to produce an inexpensive netbook. Although Jobs has said Apple won’t produce a $500 “piece of junk,” he has told analysts the Cupertino, Calif.-based company “has some pretty interesting ideas” if netbooks become more than what he’s deridingly called a “nascent” market.

Analysts say while netbooks are an interesting idea, they won’t compete directly with the iPhone.

“These are two completely different categories of products. Phones fit in your pocket, while even the smallest netbook requires a bag,” Current Analysis’ handset expert Avi Greengart told Cult of Mac.

While netbooks are shipping with 3G, they are still data – not voice – centered.

“Phones handle an essential daily communications task – voice – while netbooks do not,” Greengart said. Although you can add Skype and a Bluetooth headset, its just not the same.

“Try using it while buying groceries in a supermarket. It doesn’t work,” the analyst quipped.

Gartner analyst Ken Dulaney said netbooks may not last when notebook makers enter the market.

“They are really cheap XP machines,” Dulaney described netbooks to Cult of Mac. “When other notebooks drop down to this class the market may
dry up,” he said.

Dulaney claimed Intel was pushing the creation of netbooks as a product class separate from notebooks to prevent PC makers substituting the more expensive Celeron chip found in many laptops for the cheaper Atom chipset.

“Turns out that in some cases you can make a Celeron cheaper than an Atom but Intel wont let the manufacturer take it to this class of machines,” according to the analyst.

16 responses to “Report: Netbooks Outsell iPhones”

  1. crosswiredmind says:

    They may be outselling iPhones but I have yet to see anyone using one. I frequently see people using iPhones.

  2. Don says:

    So analysts say they “won’t compete directly with the iPhone” and “are two completely different categories of products,” but you compare their sales totals anyway. What possible relevance is this to anything? I would imagine that iPhones are outsold by both pounds sold of apples and oranges every year, too. So?

    There are 10 major makers of netbooks, meaning that not one of them has sold anything close to the number of units of the iPhone. Since netbooks have certain qualities excluding phone services, why not include sales of iPhones and iPod Touches in the figure?

    Finally, assume that you were the only netbook maker out there and sold them all. Would you like a profit margin of 3% on 5.6 M units or 35% of a mere 4.7 M units?

    Should Apple make a netbook? Well, it’s a market that has a slight following that nobody owns, yet, so it does seem like an obvious target. But this article is all smoke and no fire. Mr. Sutherland should be ashamed for posting this and Cult of Mac should be ashamed for wasting band width publishing this.

  3. BMWTwisty says:

    How is this even a story? What a goofy comparison. People buy more lettuce than truffles. So what?

  4. Bill Coleman says:

    “These are two completely different categories of products. Phones fit in your pocket, while even the smallest netbook requires a bag,”

    Which really makes me wonder why anyone made this kind of comparison in the first place. It’s almost like saying that Cashews outsell Caviar. OK — so what?

  5. firesign says:

    why would this be any surprise to anyone? it’s apples (no pun intended) and oranges really. my eee pc is a celeron, btw, and i have an iphone 3g. these analysts crack me up.

  6. Andrew DK says:

    This is how good companies turn bad. They chase after markets instead of making them. People are probably be buying netbooks as a substitute to more expensive PCs, whoopdi do. Apple will make a mini “netbook” device or morph the Air into one, it just won’t be a cut and paste of all the other crap out there.

  7. phoenix says:

    You guys are missing the point of a comparison like this – it’s very VERY valid.

    There’s a brewing storm between people who view smartphones like the iPhone as the next big mobile platform for computing, and there are people who view the increasing popularity of Linux-based netbooks as the next big thing in mobile computing.

    A lot of people are watching adoption of both technologies – high-end smartphones and low-end laptops/netbooks very carefully to see where the money is going and which platform people are interested in taking with them. Would people rather set up a netbook and plug in a cellular wifi card, or would they rather use their iPhone, Blackberry, or other smartphone? Which one will be the trend in businesses and where are consumers going to put their money?

    The market is huge, and the people who are comfortable surfing the web and checking their email on their iPhone likely won’t shell out another several hundred dollars for a netbook to open in the coffee shop when they already have their iPhone. At the same time, a lot of people just don’t want to deal with a tiny smartphone screen and would rather whip out a netbook to check their mail and toss it back in their bag when they leave the coffee shop. In either case, there likely isn’t a lot of crossover between those two people unless you’re a technology enthusiast or can make a personal, anecdotal case to have both.

  8. rishi says:

    This is the stupidest product sales comparison I have ever seen, without a doubt. “Netbooks” include a whole RANGE of models – not ONE specific product, like the iPhone.

    This is like saying that SUVs outsold the Prius – no comparison…SUVs=AN ENTIRE CATEGORY, vs. the Prius – one specific model.

    Slow news day, eh?