Hardware

Harvey Norman denies exiting netbook market

Netbooks not popular with IT retailers.

Australian-owned retailer Harvey Norman has denied speculation that it planned to stop selling netbook computers.

Luke Naish, general manager for computers and communications for Harvey Norman, told CRN the retailer "doesn't pay much attention to rumours".

Naish said Harvey's was one of the dominant players in the netbook market, selling a range of hardware products with wireless connections.

"We have one of the biggest ranges of netbook products and different finance options," he said.

The retailer was "extremely excited" and "bullish" about the netbook hardware category, said Naish.

"[I'm] also [excited] about the release of Windows 7 in October. I think the category's just getting started," he said.

Technology and research advisory firm, Gartner, found shipments of netbooks - or mini-notebooks - in Australia reached 14.3 percent of total mobile PC shipments, in the second quarter of 2009.

In its report on the local PC market for the second quarter of 2009, Gartner said the growth rate outperformed most of the top mature markets in Western Europe, with 97,220 mini-notebooks sold in Australia during this period.

The consumer market accounted for 90.3 percent of mini-notebook sales and telecoms service providers represented one of the fastest-growing channels for the product in Asia Pacific.

Ming Koh, co-director of independent IT retailer, PC Market told CRN he wouldn't be surprised if retailers started getting out of the netbook market.

Koh said hardware manufacturers, mobile phone service providers and telcos were all trying to take a slice of the "very small pie."

Netbooks were very popular with consumers. However retailers needed to sell "more than one netbook" to make similar "margins to a notebook", he said.

"The rebates and the margins on the product are low," he said. "I'm sticking with the category because I believe it will evolve into a higher end product."

Eric Kwon, founder of Newcastle based reseller, Tri-Benedict, said retailers were lucky if they made between $35-$50 margin on the sale of a netbook.

"There's a lot of effort that goes into selling these products," he said. "Not many users are informed about the slowness of the hardware."

Kwon said its customers signed a "disclaimer" when they purchased a netbook.

"Customers don't realise the machine was really built for basic Internet use in third world countries," he said.

Harvey Norman denies exiting netbook market

6 comments in this discussion

"sholtomacpherson said "I was reading a thread the other day about the quality of video taken by the iPhone 3GS compared to a dedicated handycam and someone made the point that he takes a lot more ..."

By bld

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Comments: 6

Thoughts on this article? Add a comment below.

bld Sep 3, 2009 6:14 PM	The article quotes a reseller: "Customers don't realise the machine was really built for basic Internet use in third world countries," he said. That's like a salesman saying you don't really want this Hyundai, built for folks in Asia with less disposable income than you, you really want this Porsche. It's disparaging a product that may well be good enough, in an attempt to upsell the consumer. BLECH. Unless you got one of those toy One-Lightweight-PC-for-all-kiddies plastic things with the horrible screens and mediocre capabilities and awkward software, odds are, you got a netbook designed for net access on the go in the same kind of country that you live in. Can you run video editing software or be a professional gamer at mobile "LAN parties" using netbook hardware? Probably not. But can you browse the net, send email, create and display Powerpoints, keep your notebook open on an airplane no matter what the heathen in front of you is doing with his seat, use MS Word, and even -- surprise -- develop commercial applications or web sites using one? Yes. There are Australian web companies I won't name who will admit to running their whole company (except for the web servers in a data center somewhere) off these "third world" netbooks for a month or two at a time when all of the key employees were travelling. I am a senior-level person in the industry, and I love my Asus eeePC! I was originally skeptical, and would travel with two computers: my original 15" laptop and my small eeePC (a model with hard disk). What I found was that there was NOTHING I normally did on my larger laptop that I couldn't do on the eeePC. The annoyance of the smaller screen size (it IS an annoyance, let me be clear) is compensated for by the anywhere, anytime nature of the eeePC. It slips almost unnoticed into a briefcase or even a large purse(!) and you can carry it all day with no more effort than it would take to carry a hardback novel. Add cellular Internet from your mobile provider, and life starts to look really good. Combine a netbook and cellular Internet, and suddenly you realize one day that you're never without net access because you have gotten into the habit of always carrying your netbook with you. Sure, you can do email and browsing on your Blackberry, too. But I guarantee you it's nicer to type out long emails and edit documents on MY keyboard than it is on yours. And watching movies (ripped from DVD) on a 9" or 10" screen is much nicer than watching them on an ipod. Admittedly, don't try this with HD content, as neither the processing power nor the screen are good enough, but for normal DVD's it works fine. For frequent travellers who don't need the latest processing power (I suspect, most frequent travellers don't), netbooks with cellular Internet are a very worthwhile productivity and life simplification investment. NOT a third-world product at all. NOT. Given the choice of a $2500 state of the art big notebook or the next model of the eeePC as my next notebook, I WOULD PICK THE EEE, because I know based on 9 months of experience with my current model that I use it more than I've used ANY notebook I've owned or been assigned since 1988. It's somewhat telling that many of the "cool kids" in US tech meccas like Silicon Valley and Seattle are buying netbooks and installing Mac OS X on them (google for it), too. The netbook is one of those rare products that's captured bits of both the business and the trendy consumer markets.
Ned Sep 3, 2009 7:09 PM	The ATOM really is a chip for third world countries and it was widely laughed at within the industry as a joke. Unfortunately a netbook is easily confused with a true notebook and many consumers purchased and were dissapointed - sure some were happy with the limited performance but considering an ATOM 1.6 is HALF THE SPEED of a Celeron 2.0, just adding an antivirus program to the standard XP slowed the system down to a crawl. Ever tried to open full screen a youtube video - it drops frames constantly, and forget about anything with normal resolution - web pages are cut off. Improvements to Windows to enhance the slow speed can help but the reality is that the ATOM is a VERY poor performer. Intel is now releasing Core 2 Solo chips with similar battery life to the ATOM but 3 times faster for very similar money. These mini notebooks are due any day now and are a MUCH better option to the Netbook and should relegate the ATOM processor and the Netbook to the backyards of the third world where it belongs. Mobile phone processors are more powerful these days !
lguan Sep 3, 2009 8:09 PM	Both great comments from our readers. I think the all retailers have a responsibility to educate their customers on whatever product they by. There are consumers out there that aren't as educated on netbook and will go out and get a netbook because its cheap, small and portable. They won't realise these netbooks are limited in what they can do compared to a notebook. I'm not disparaging netbooks, I have one and it's great for what it does, but I also have a home PC which I do the majority of my work on. However I would like to know, just out of curiosity, how many IT retailers have had customers come in and purcahse a netbook without realising what they were getting into? As for comparing the purchase of netbook/notebook to Hyundi/Porsche. When most people go out to buy a car they do it with the model, make and other car details in mind. However how many customers do the same with the technology they purchase? How many customers come in and purchase technology on a whim, even in these financial times. Does the cheap price tag on a netbook make it that much more appealing to an impulse buyer. I would be very interested in finding out from our readers out there.
bld Sep 3, 2009 9:23 PM	The Atom chip is sad, I agree. However, the netbook FORM FACTOR and functionality is not defined by the chip, although its performance is currently limited by the chip and the graphics platform. Would I prefer a very high performance netbook to an 1.6ghz Atom netbook? Yes. However, until such a thing is available at a price I can afford, I can still get more done with a slower chip in the netbook form factor than I can with a larger, faster computer I'm not always willing to lug around. And most business uses of a notebook don't involve heavy-duty graphics. Like the author of the article, I too have desktops at home and work. A netbook is a good option as your portable second computer, but unless you know what you're getting into, I will agree that you probably shouldn't try it as your only computer. That said, I've lived almost exclusively on my netbook running Windows 7 (and, if you must know, also Ubuntu Linux, because there's a special version of it customized for the eee) since the beginning of the year. I've written chapters of books. I've written web apps. I watch youtube on it. I watch DVD's on it via a USB DVD drive. And I just don't have a problem with it. Perhaps I'm extremely lucky? Regarding car purchases, I do not tend to go in with a particular make and model in mind, because that's not the way to get the best deal. I start with "I want a sedan like a (c)," and maybe have a few choices in mind, and work from there. An old friend of mine is even simpler than that. He'll walk into each dealership in a row of them along a road, and say, "I want a white truck. 2 door. V6. Show me what you have." Before I bought my netbook, I shopped around and considered Asus, Acer and Dell. I leaned toward the Asus and Acer because I liked the look of them more than I liked the look of the Dell. But what did I eventually do? Dear original author, I IN FACT DID PURCHASE MY NETBOOK ON A WHIM when I saw it on sale at Myer, knowing that I had an international trip coming up and figuring I could do worse than have a small machine to use on the plane. It was an impulse purchase of a toy, and I was surprised that the machine turned out to be a workhorse for me. Sometimes, convenience is at least as high on the feature checklist as performance is. I wasn't making a point about brands as much as I was making a point of perceived quality and performance levels. You could just as easily substitute 2 models from the same brand, or even 2 different configurations of the same model. And you'd still hear a very similar "upsell" story from the car salesman. I think netbooks will be around for a while. It's not always a question of price. For about the same price, I could sometimes buy a low-end laptop on sale. But that's big and clunky, and those cheap laptops are invariably not beautiful examples of design engineering. Look at the eee, look at the Acer Aspire One... they look slick.
sholtomacpherson Sep 4, 2009 9:35 AM	I was reading a thread the other day about the quality of video taken by the iPhone 3GS compared to a dedicated handycam and someone made the point that he takes a lot more video with the phone than with the camera because it's always at hand. the video isn't as good quality, but it's better than nothing because the handycam is always in a drawer. I agree with bid - people have been wanting the form factor for a very long time but couldn't afford the premium for mini-notebooks. but if there's no margin in selling these netbooks then it doesn't matter if people love them; retailers need to stay profitable. as do IT manufacturers, hence the gradual rise in features and price for netbooks and the increased marketing of "thin and light" notebooks as a better alternative. mini-computers are here to stay, they just have to work out a sustainable business model to support them.
bld Sep 4, 2009 10:49 PM	sholtomacpherson said "I was reading a thread the other day about the quality of video taken by the iPhone 3GS compared to a dedicated handycam and someone made the point that he takes a lot more video with the phone than with the camera because it's always at hand. the video isn't as good quality, but it's better than nothing because the handycam is always in a drawer." Some professional photographers I know have gotten shots they wouldn't have otherwise gotten, because they weren't expecting any photo ops and weren't lugging their gear, but for the camera-equipped cell phone in their pocket. The same argument is made for the "flip" HD videocam vs. a full size camcorder, which is another "tradeoff" device. I think what's scarier to resellers is not that users are unhappy with netbooks, but that people are too willing to make the tradeoffs they entail, cutting resellers' margins.