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Ultra Low-Cost Notebooks Destined As Second Computers

The most compelling reason to own the small device is to avoid carrying around a heavier and bulkier regular notebook, IDC analysts found.
The ultra-low-cost notebook, a clamshell device with a screen measuring 7 to 10 inches, is likely to find its place among consumers looking for a second computer for accessing the Web on the road, a market research firm said Thursday.

While the sub-$500 notebooks were expected to be potential solutions to the digital divide in developing countries, IDC believes they are more likely to be used as a tool for accessing the Web in Wi-Fi hotspots in developed nations.

The ultraportable notebooks, as defined by IDC, run a full operating system, support third-party applications, and include a keyboard and wireless broadband connectivity. Examples include the Asus Eee PC and the One Laptop Per Child XO.

The most compelling reason to own the small device is to avoid carrying around a heavier and bulkier regular notebook. The low-cost notebooks offer a true Web browsing experience, which sets them apart from smartphones and other handheld devices, IDC said.

The smaller notebooks are not expected to attract the majority of consumers, IDC said. Most of them will opt to pay a bit more for a full-size notebook that will become their only portable. The only market that the research firm sees the ultraportables used as a primary computer would be for schoolchildren from kindergarten to the eighth grade.

In addition, PC vendors wary of the very small margins on the low-cost devices are expected to promote them as a second PC, not as replacements for current machines. Even then, vendors "will still face challenges in making them a profitable business," IDC analyst Bob O'Donnell said in a statement.

Worldwide shipments of ultra-low-cost notebooks will grow from less than 500,000 units last year to more than 9 million in 2012, IDC predicts. Because of low average selling prices, revenue will be less than $3 billion.

As a percentage of the total consumer PC market, the devices will remain under 5% through the forecast period, the analyst firm said. However, the notebooks could eventually capture more than a third of the education market by 2012.