Microsoft Eating Up U.S. and Global Netbook Markets

Microsoft's chest thumping last week over its 96% share of the U.S. netbook market for February doesn't appear to be just its normal bravado as the company also is charging toward dominance on a global front.

Microsoft's chest thumping last week over its 96% share of the U.S. netbook market for February doesn't appear to be just its normal bravado as the company also is charging toward dominance on a global front.

According to statistics from IDC, Microsoft owned 76% of the global netbook market in 2008 and that number will only get bigger in the coming years.

In 2008, Linux came in with a share of 24% and IDC predicts that number will be in the single digits come the end of this year.

Globally, IDC says 10 million netbooks shipped in 2008. That number is expected to double this year and grow by 25% in 2010.

The result would seem to be another market where Microsoft dominates.

The only developments that may derail the juggernaut are mobile device chips, namely the ARM processor, that will be the platform for Google's Android OS, Canonical's Ubuntu and other Linux distributions. Netbooks with those configurations are slated to hit the market in the second half of 2009. In addition, the Moblin open source project is focusing its platform efforts on netbooks and mobile devices.

Those developments could bring Linux-based operating systems a bigger share of the netbook market, but they will need one important ingredient that Microsoft has in spades. "The advantage for the Windows platform is that it has a lot of developers and a lot of applications," says Richard Shim, an analyst with IDC 

Shim says the dynamics could change if the non-Windows platforms attract a decent amount of developers who create a number of must-have applications that run on alternative platforms.

"Obviously, that would change the game," Shim says.

Online services, such as e-mail and social networking, could be another driver as users install fewer, if any, applications on their machines.

Some also point out that the buyer should beware of the true costs of Windows netbooks. But others say the fact that the industry really has no solid definition for the value of a netbook will help Windows maintain its lead.

The netbook is stuck in limbo between the ultra-convenience and voice capabilities of the smart phone and the power and full-screen and keyboard size of a laptop.

"Netbooks will continue to be small, low-cost entry products and people won't see them as some new product category but as small notebooks," says Stephen Baker, vice president of industry analysis for market research firm NPD Group.

It was NPD's research that Microsoft cited last week when it said it owned 96% of the U.S. netbook market in February.

Baker says the combination of the forthcoming Windows 7 and the perception that netbooks are smaller versions of PCs will wipe out the notion that the netbook is something different from a PC.

"In the long term, the netbook will be the entry-level of the PC market," Baker says. "As long as they are marketed and sold to people as PCs it is going to be hard to change that mindset. And for a lot of consumers the PC platform is Windows. Despite its flaws, it is something they have been using."

And IDC says consumers will have a major hand in deciding the fate and definition of the netbook. In 2008, 80% of netbooks were purchased by consumers.

"That number won't decrease below 75%," Shim says. He added that the forecast isn't just for 2009, but for the foreseeable future.

This story, "Microsoft Eating Up U.S. and Global Netbook Markets" was originally published by NetworkWorld .

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