Is Taiwan's battered tech industry set for a "netbook" boost? "Um.... maybe."
Global Post, March 11, 2009
TAIPEI — It's the hot rumor of the week in Taiwan, and throughout the tech world: Apple Computer may be getting into the "netbook" business.
A Taiwanese business daily reported the news Monday, saying the computer giant would partner with two Taiwanese contractors on the project. Dow Jones lent the story more heft in a report here.
Netbooks — pioneered commercially by Taiwanese firm Asustek — are cheap, mini-laptops designed mainly for surfing the Web while on the go.
Since Asustek jump-started the market segment 17 months ago with its popular Eee PC, all the other big players — HP and Dell from the U.S., Taiwan's Acer — have gotten in the game too.
Almost all netbooks are made by Taiwanese contractors. The island punches far above its weight in the global tech sector, supplying the big brands with much of the world's laptops, motherboards, flat panels and computer monitors.
Amid the global downturn, netbooks are a rare bright spot. Tech consultancy Gartner reported on March 2 that although 2009 would be the worst-ever year for the PC industry as a whole (with an 11.9 percent decline in shipments from last year), netbook sales are due to nearly double.
"Worldwide mini-notebook shipments are forecast to total 21 million units in 2009, up from 2008 shipments of 11.7 million units. Mini-notebooks will cushion the overall PC market slowdown, but they remain too few to prevent the market's steep decline."
Brits, French and Germans have especially cottoned on to the tiny tablets. In Western Europe, total PC shipments actually defied the downturn. They surged 12 percent year-on-year in the last quarter of 2008, said Gartner, led by growth in "netbooks."
So it's no wonder that Apple too might be fixing to get in the business.
But are the reports true?
According to several "industry insiders" I spoke to who were not willing to be named, "Er ... um ... no comment."
But they expressed skepticism, as did analyst Tracy Tsai, with Gartner here in Taipei.
"I don't think they'll do it," said Tsai, referring to Apple launching a netbook. "If they did, it would be a high-end, niche product, and it wouldn't be competitive on price."
Tsai noted that Apple protects its high-end, high-quality brand image jealously. But the essential market appeal of netbooks is cheapness: they're the poor man's laptop.
And Tsai expects netbook prices — most now in the $300 to $600 range — to drop even further. That's because the next trend, she says, is even cheaper devices: "ARM-based" netbooks.
That refers to devices that will use a type of processor developed by the British firm ARM Holdings. They've generated buzz as the next big thing, promising to bridge the gap between third-generation cell phones and netbooks by powering portable Internet devices more cheaply and with less energy.
One potentially huge market for such devices is China. Tsai says the ARM system-on-a-chip processors could power a new generation of so-called "white-box" netbooks.
The catchy name comes from "white box" cell-phones. These are generic (that is, unbranded) cell phones churned out by small Chinese firms, many using Taiwan-made semiconductors. They're already a huge business in China.
"They sell very well because they're so cheap," said Tsai. "It's likely that [manufacturers] can copy the success of 'white box' cellphones to 'white box' netbooks."
With market momentum pushing netbook prices even lower, all the less reason for Apple to get in the game, says Tsai.
Skeptics and Apple aficionados — a fiercely loyal, at times obsessive clan — also poured cold water on the Apple netbook idea, in various web postings. (A sampling: "Get over it! There's no Apple netbook," and "When Dow Jones says there will be an Apple netbook, there won't be an Apple netbook."
Apple products have a certain snob appeal, and to some the very idea of the company slumming it in the decidedly downmarket "netbook" business is alarming — akin to an elite French vintner selling wine coolers.
If true, though, the Apple order would be a shot in the arm for Taiwan's tech industry, which is tanking amid poor demand for discretionary electronics products in the key U.S. market.
But it wouldn't necessarily mean more jobs: These days, Taiwanese firms assemble most of their gadgets in China.
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