Netbook Growth Means Smart Revenue Growth for Some

google-chrome-netbookNetbooks are emerging as one of the few bright spots in computer sales during this global economic downturn, with DisplaySearch estimating that in 2009, worldwide sales of netbooks will double from the prior year, to 32.7 million. To put that number in perspective, that’s more iPhones than Apple (s aapl) is forecast to sell this year. Granted, we’re not comparing apples to Apples here, as these are different device classes, but merely looking to illustrate that there are already some serious numbers to be found in this still-nascent market.

But more important is how such sales predictions compare to those of higher-margin notebooks, as well as where in the world the growth is taking place and what’s driving it. As DisplaySearch notes:

  • In North America, netbook sales weren’t quite 10 percent that of notebook sales in 2008. That number is expected to grow to around 22 percent in 2009. Instead of one netbook to every 10 notebooks sold, DisplaySearch estimates it will be a 1:5 ratio this year. That can’t bode well for hardware makers’ profit margins.
  • Out of six global regions in the DisplaySearch study, when it came to netbook sales in 2008, China languished near the bottom. In 2009, however, sales in the region are forecast to jump 260.1 percent — more than 10 times that of notebooks’ expected rise.
  • In Europe, where telecom carriers often subsidize netbooks, resulting in no out-of-pocket cost to consumers, the netbook penetration rate is already at 22 percent. That’s since just October of 2007, when what is widely considered to be the first netbook — the ASUS Eee PC Surf — was first introduced. Now that all three U.S. carriers are bundling subsidized netbooks with 3G service, it’s safe to expect a faster rise in penetration rates here as well.

Sales numbers aside, who is poised to benefit? Given the degree to which sales of netbooks are seen rising even amid the current economic struggles, it’s no wonder that Google plans to fight Microsoft for the netbook operating system space — they offer what is expected to be more than 30 million environments in which customers can click ads on a recurring basis this year alone. That’s a smart, long-term strategy, so my odds are on Google. Microsoft’s strategy to sell the OS license for a one-time fee simply doesn’t offer the same growth potential. Perhaps Redmond should give Windows away for free on netbooks and look for alternative methods of revenue in this hot market.